strategic analysis of ttk prestige ltd
TRANSCRIPT
1
TTK PRESTIGE LTD
WHISTLING ITS WAY TO THE TOPhellip
2
INDEX
SL No DETAILS PAGE No
1) EXECUTIVE SUMMARY 3
2) SITUATIONAL ANALYSIS
a) GRAND STRATEGIES 7
b) GENERIC 10
c) PORTFOLIO 14
d) PORTERrsquoS 5 FORCES MODEL 22
e) PESTLE 27
f) CAP 28
g) SWOT 30
h) VALUE CHAIN ANALYSIS 33
i) SOLUTIONSTATEGIES ALTERNATIVES 37
3) CONCLUSION 39
4) REFRENCES 39
3
EXECUTIVE SUMMARY
TTK PRESTIGE LTD
A TTK Group Chennai based company TTK prestige is one of the leading
players in the domestic kitchen appliances industry Its product portfolio spans
from domestic cooking vessels to electrical appliances and has recently forayed
into modular kitchen designing TTK‟s products include pressure cookers non-
stick cookware electrical appliances amp gas
stoves all of which command high brand recall and a price premium over competitors
The company‟s topline has grown at 150+ CAGR over the last 5 years Profitabilityalso improved and grew by 30+ over the same time period The strategy for maintaining growth and improving profitability has been product innovation brand building and financial prudence
The company has over the years evolved from being a mere pressure cooker
product brand to a full-fledged kitchen appliances brand Its wide product
portfolio and wide spread retail initiative will help company grow faster than
the industry while branded industry itself will grow at 5-6
The pressure cooker industry which has a penetration of mere 30-35 in India has a lot
of scope of growth with increased availability of LPG amp piped natural gas in the next
few years While the non-stick cookware segment will grow on the back of
4
replacement demand urbanization and growing health consciousness in cooking
styles
We believe the macro demographic trends in India will drive the growth of the kitchen
appliance industry per se The company‟s vision for new business opportunities such as
modular kitchens and its product innovation provides good business visibility for the
company
Mainstay Pressure Cooker Segment Growing at a Stable Rate
Pressure Cookers is TTK‟s single largest segment which contributes around 54 to the
topline currently TTK‟s pressure cookers are different from other cookers on account
of its outer lid-closing feature This feature provides the user with some additional
cooking capacity vis-agrave-vis inner lid cookers
The Indian pressure cooker market size is approx 9 million pieces pa which is
equally divided between organized and unorganized sector TTK enjoys 30+ market
share in the pressure cooker market of which it is the market leader in the outer lid
market segment with 65 market share and 5 of its recently entered into and a
highly competitive inner lid market
The branded cookers market has been growing at 5-6 over the last 4-5 years while
TTK has witnessed volumes growth at 13-15 We expect this segment to continue to
clock similar volumes growth over the next 2-3 years
Apart from that TTK has introduced a niche product through the launch of pressure
handi a few years back
5
TTK‟s strategy in this segment has been to innovate and give the user a better product experience TTK has introduced both aluminum and stainless steel cookers the latter of which has given boost to the overall average realization
TTK‟s product innovation superior quality and product technology has
always enabled it to command a superior price realization over its peers Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5 price premium over other branded manufacturers
De-Risking Business by focusing on the Non-Stick Cookware Range
In a bid to de-risk its business from single product dependence TTK forayed into the
cookware segment Over the years TTK has emerged as the market leader in the non-
stick segment It was only recently in FY07 when the company was flushed with
demand and hence operated at 200+ capacity utilization TTK increased it‟s
capacity from 500000 units to 1800000 units in FY08 TTK competes primarily
with local and regional players such as Premier in this segment
Growing urbanization health consciousness in cooking styles of customers and the
segments unique ability for bulky sales (majority consumers do not buy a single pan
but a set of non-stick items) will help TTK to grow at a healthy rate The life cycle for
the non-stick cookware is 2-3 years hence giving rise to a large replacement market
Hence we expect the cookware segment to grow at a CAGR of 15-17 for the next 2-3
years
Investing in setting up In-house Kitchenware (Electrical Appliances)
Factory in Uttarakhand
Electric kitchenware is the company‟s third business segment and has been
growing much more aggressively than the other segment This segment includes
all types of electric kitchen appliances such as mixer toaster chimneys etc
The company‟s strategy is mainly to offer complete range of kitchen appliances
while encashing on its existing retail network setup amp existing brand which
symbolizes quality reliability and safety for all kitchen products for a housewife
The finished products of this segment are primarily outsourced at present
The growing demand for TTK‟s electric kitchen appliances has enabled this
segment to grow much faster On the back volume growth the company plans to
set up its own unit in Uttarakhand at a cost of INR 11 crs This will enable
TTK to control outsourcing cost monitor quality and at the same time
aggressively penetrate this segment It is important to note that the contribution
of this segment to topline has gone up in the last one-year from 13 to 17 We
expect its contribution to go up to 20 once the new plant is commissioned by at
the end of this fiscal
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
2
INDEX
SL No DETAILS PAGE No
1) EXECUTIVE SUMMARY 3
2) SITUATIONAL ANALYSIS
a) GRAND STRATEGIES 7
b) GENERIC 10
c) PORTFOLIO 14
d) PORTERrsquoS 5 FORCES MODEL 22
e) PESTLE 27
f) CAP 28
g) SWOT 30
h) VALUE CHAIN ANALYSIS 33
i) SOLUTIONSTATEGIES ALTERNATIVES 37
3) CONCLUSION 39
4) REFRENCES 39
3
EXECUTIVE SUMMARY
TTK PRESTIGE LTD
A TTK Group Chennai based company TTK prestige is one of the leading
players in the domestic kitchen appliances industry Its product portfolio spans
from domestic cooking vessels to electrical appliances and has recently forayed
into modular kitchen designing TTK‟s products include pressure cookers non-
stick cookware electrical appliances amp gas
stoves all of which command high brand recall and a price premium over competitors
The company‟s topline has grown at 150+ CAGR over the last 5 years Profitabilityalso improved and grew by 30+ over the same time period The strategy for maintaining growth and improving profitability has been product innovation brand building and financial prudence
The company has over the years evolved from being a mere pressure cooker
product brand to a full-fledged kitchen appliances brand Its wide product
portfolio and wide spread retail initiative will help company grow faster than
the industry while branded industry itself will grow at 5-6
The pressure cooker industry which has a penetration of mere 30-35 in India has a lot
of scope of growth with increased availability of LPG amp piped natural gas in the next
few years While the non-stick cookware segment will grow on the back of
4
replacement demand urbanization and growing health consciousness in cooking
styles
We believe the macro demographic trends in India will drive the growth of the kitchen
appliance industry per se The company‟s vision for new business opportunities such as
modular kitchens and its product innovation provides good business visibility for the
company
Mainstay Pressure Cooker Segment Growing at a Stable Rate
Pressure Cookers is TTK‟s single largest segment which contributes around 54 to the
topline currently TTK‟s pressure cookers are different from other cookers on account
of its outer lid-closing feature This feature provides the user with some additional
cooking capacity vis-agrave-vis inner lid cookers
The Indian pressure cooker market size is approx 9 million pieces pa which is
equally divided between organized and unorganized sector TTK enjoys 30+ market
share in the pressure cooker market of which it is the market leader in the outer lid
market segment with 65 market share and 5 of its recently entered into and a
highly competitive inner lid market
The branded cookers market has been growing at 5-6 over the last 4-5 years while
TTK has witnessed volumes growth at 13-15 We expect this segment to continue to
clock similar volumes growth over the next 2-3 years
Apart from that TTK has introduced a niche product through the launch of pressure
handi a few years back
5
TTK‟s strategy in this segment has been to innovate and give the user a better product experience TTK has introduced both aluminum and stainless steel cookers the latter of which has given boost to the overall average realization
TTK‟s product innovation superior quality and product technology has
always enabled it to command a superior price realization over its peers Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5 price premium over other branded manufacturers
De-Risking Business by focusing on the Non-Stick Cookware Range
In a bid to de-risk its business from single product dependence TTK forayed into the
cookware segment Over the years TTK has emerged as the market leader in the non-
stick segment It was only recently in FY07 when the company was flushed with
demand and hence operated at 200+ capacity utilization TTK increased it‟s
capacity from 500000 units to 1800000 units in FY08 TTK competes primarily
with local and regional players such as Premier in this segment
Growing urbanization health consciousness in cooking styles of customers and the
segments unique ability for bulky sales (majority consumers do not buy a single pan
but a set of non-stick items) will help TTK to grow at a healthy rate The life cycle for
the non-stick cookware is 2-3 years hence giving rise to a large replacement market
Hence we expect the cookware segment to grow at a CAGR of 15-17 for the next 2-3
years
Investing in setting up In-house Kitchenware (Electrical Appliances)
Factory in Uttarakhand
Electric kitchenware is the company‟s third business segment and has been
growing much more aggressively than the other segment This segment includes
all types of electric kitchen appliances such as mixer toaster chimneys etc
The company‟s strategy is mainly to offer complete range of kitchen appliances
while encashing on its existing retail network setup amp existing brand which
symbolizes quality reliability and safety for all kitchen products for a housewife
The finished products of this segment are primarily outsourced at present
The growing demand for TTK‟s electric kitchen appliances has enabled this
segment to grow much faster On the back volume growth the company plans to
set up its own unit in Uttarakhand at a cost of INR 11 crs This will enable
TTK to control outsourcing cost monitor quality and at the same time
aggressively penetrate this segment It is important to note that the contribution
of this segment to topline has gone up in the last one-year from 13 to 17 We
expect its contribution to go up to 20 once the new plant is commissioned by at
the end of this fiscal
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
3
EXECUTIVE SUMMARY
TTK PRESTIGE LTD
A TTK Group Chennai based company TTK prestige is one of the leading
players in the domestic kitchen appliances industry Its product portfolio spans
from domestic cooking vessels to electrical appliances and has recently forayed
into modular kitchen designing TTK‟s products include pressure cookers non-
stick cookware electrical appliances amp gas
stoves all of which command high brand recall and a price premium over competitors
The company‟s topline has grown at 150+ CAGR over the last 5 years Profitabilityalso improved and grew by 30+ over the same time period The strategy for maintaining growth and improving profitability has been product innovation brand building and financial prudence
The company has over the years evolved from being a mere pressure cooker
product brand to a full-fledged kitchen appliances brand Its wide product
portfolio and wide spread retail initiative will help company grow faster than
the industry while branded industry itself will grow at 5-6
The pressure cooker industry which has a penetration of mere 30-35 in India has a lot
of scope of growth with increased availability of LPG amp piped natural gas in the next
few years While the non-stick cookware segment will grow on the back of
4
replacement demand urbanization and growing health consciousness in cooking
styles
We believe the macro demographic trends in India will drive the growth of the kitchen
appliance industry per se The company‟s vision for new business opportunities such as
modular kitchens and its product innovation provides good business visibility for the
company
Mainstay Pressure Cooker Segment Growing at a Stable Rate
Pressure Cookers is TTK‟s single largest segment which contributes around 54 to the
topline currently TTK‟s pressure cookers are different from other cookers on account
of its outer lid-closing feature This feature provides the user with some additional
cooking capacity vis-agrave-vis inner lid cookers
The Indian pressure cooker market size is approx 9 million pieces pa which is
equally divided between organized and unorganized sector TTK enjoys 30+ market
share in the pressure cooker market of which it is the market leader in the outer lid
market segment with 65 market share and 5 of its recently entered into and a
highly competitive inner lid market
The branded cookers market has been growing at 5-6 over the last 4-5 years while
TTK has witnessed volumes growth at 13-15 We expect this segment to continue to
clock similar volumes growth over the next 2-3 years
Apart from that TTK has introduced a niche product through the launch of pressure
handi a few years back
5
TTK‟s strategy in this segment has been to innovate and give the user a better product experience TTK has introduced both aluminum and stainless steel cookers the latter of which has given boost to the overall average realization
TTK‟s product innovation superior quality and product technology has
always enabled it to command a superior price realization over its peers Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5 price premium over other branded manufacturers
De-Risking Business by focusing on the Non-Stick Cookware Range
In a bid to de-risk its business from single product dependence TTK forayed into the
cookware segment Over the years TTK has emerged as the market leader in the non-
stick segment It was only recently in FY07 when the company was flushed with
demand and hence operated at 200+ capacity utilization TTK increased it‟s
capacity from 500000 units to 1800000 units in FY08 TTK competes primarily
with local and regional players such as Premier in this segment
Growing urbanization health consciousness in cooking styles of customers and the
segments unique ability for bulky sales (majority consumers do not buy a single pan
but a set of non-stick items) will help TTK to grow at a healthy rate The life cycle for
the non-stick cookware is 2-3 years hence giving rise to a large replacement market
Hence we expect the cookware segment to grow at a CAGR of 15-17 for the next 2-3
years
Investing in setting up In-house Kitchenware (Electrical Appliances)
Factory in Uttarakhand
Electric kitchenware is the company‟s third business segment and has been
growing much more aggressively than the other segment This segment includes
all types of electric kitchen appliances such as mixer toaster chimneys etc
The company‟s strategy is mainly to offer complete range of kitchen appliances
while encashing on its existing retail network setup amp existing brand which
symbolizes quality reliability and safety for all kitchen products for a housewife
The finished products of this segment are primarily outsourced at present
The growing demand for TTK‟s electric kitchen appliances has enabled this
segment to grow much faster On the back volume growth the company plans to
set up its own unit in Uttarakhand at a cost of INR 11 crs This will enable
TTK to control outsourcing cost monitor quality and at the same time
aggressively penetrate this segment It is important to note that the contribution
of this segment to topline has gone up in the last one-year from 13 to 17 We
expect its contribution to go up to 20 once the new plant is commissioned by at
the end of this fiscal
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
4
replacement demand urbanization and growing health consciousness in cooking
styles
We believe the macro demographic trends in India will drive the growth of the kitchen
appliance industry per se The company‟s vision for new business opportunities such as
modular kitchens and its product innovation provides good business visibility for the
company
Mainstay Pressure Cooker Segment Growing at a Stable Rate
Pressure Cookers is TTK‟s single largest segment which contributes around 54 to the
topline currently TTK‟s pressure cookers are different from other cookers on account
of its outer lid-closing feature This feature provides the user with some additional
cooking capacity vis-agrave-vis inner lid cookers
The Indian pressure cooker market size is approx 9 million pieces pa which is
equally divided between organized and unorganized sector TTK enjoys 30+ market
share in the pressure cooker market of which it is the market leader in the outer lid
market segment with 65 market share and 5 of its recently entered into and a
highly competitive inner lid market
The branded cookers market has been growing at 5-6 over the last 4-5 years while
TTK has witnessed volumes growth at 13-15 We expect this segment to continue to
clock similar volumes growth over the next 2-3 years
Apart from that TTK has introduced a niche product through the launch of pressure
handi a few years back
5
TTK‟s strategy in this segment has been to innovate and give the user a better product experience TTK has introduced both aluminum and stainless steel cookers the latter of which has given boost to the overall average realization
TTK‟s product innovation superior quality and product technology has
always enabled it to command a superior price realization over its peers Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5 price premium over other branded manufacturers
De-Risking Business by focusing on the Non-Stick Cookware Range
In a bid to de-risk its business from single product dependence TTK forayed into the
cookware segment Over the years TTK has emerged as the market leader in the non-
stick segment It was only recently in FY07 when the company was flushed with
demand and hence operated at 200+ capacity utilization TTK increased it‟s
capacity from 500000 units to 1800000 units in FY08 TTK competes primarily
with local and regional players such as Premier in this segment
Growing urbanization health consciousness in cooking styles of customers and the
segments unique ability for bulky sales (majority consumers do not buy a single pan
but a set of non-stick items) will help TTK to grow at a healthy rate The life cycle for
the non-stick cookware is 2-3 years hence giving rise to a large replacement market
Hence we expect the cookware segment to grow at a CAGR of 15-17 for the next 2-3
years
Investing in setting up In-house Kitchenware (Electrical Appliances)
Factory in Uttarakhand
Electric kitchenware is the company‟s third business segment and has been
growing much more aggressively than the other segment This segment includes
all types of electric kitchen appliances such as mixer toaster chimneys etc
The company‟s strategy is mainly to offer complete range of kitchen appliances
while encashing on its existing retail network setup amp existing brand which
symbolizes quality reliability and safety for all kitchen products for a housewife
The finished products of this segment are primarily outsourced at present
The growing demand for TTK‟s electric kitchen appliances has enabled this
segment to grow much faster On the back volume growth the company plans to
set up its own unit in Uttarakhand at a cost of INR 11 crs This will enable
TTK to control outsourcing cost monitor quality and at the same time
aggressively penetrate this segment It is important to note that the contribution
of this segment to topline has gone up in the last one-year from 13 to 17 We
expect its contribution to go up to 20 once the new plant is commissioned by at
the end of this fiscal
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
5
TTK‟s strategy in this segment has been to innovate and give the user a better product experience TTK has introduced both aluminum and stainless steel cookers the latter of which has given boost to the overall average realization
TTK‟s product innovation superior quality and product technology has
always enabled it to command a superior price realization over its peers Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5 price premium over other branded manufacturers
De-Risking Business by focusing on the Non-Stick Cookware Range
In a bid to de-risk its business from single product dependence TTK forayed into the
cookware segment Over the years TTK has emerged as the market leader in the non-
stick segment It was only recently in FY07 when the company was flushed with
demand and hence operated at 200+ capacity utilization TTK increased it‟s
capacity from 500000 units to 1800000 units in FY08 TTK competes primarily
with local and regional players such as Premier in this segment
Growing urbanization health consciousness in cooking styles of customers and the
segments unique ability for bulky sales (majority consumers do not buy a single pan
but a set of non-stick items) will help TTK to grow at a healthy rate The life cycle for
the non-stick cookware is 2-3 years hence giving rise to a large replacement market
Hence we expect the cookware segment to grow at a CAGR of 15-17 for the next 2-3
years
Investing in setting up In-house Kitchenware (Electrical Appliances)
Factory in Uttarakhand
Electric kitchenware is the company‟s third business segment and has been
growing much more aggressively than the other segment This segment includes
all types of electric kitchen appliances such as mixer toaster chimneys etc
The company‟s strategy is mainly to offer complete range of kitchen appliances
while encashing on its existing retail network setup amp existing brand which
symbolizes quality reliability and safety for all kitchen products for a housewife
The finished products of this segment are primarily outsourced at present
The growing demand for TTK‟s electric kitchen appliances has enabled this
segment to grow much faster On the back volume growth the company plans to
set up its own unit in Uttarakhand at a cost of INR 11 crs This will enable
TTK to control outsourcing cost monitor quality and at the same time
aggressively penetrate this segment It is important to note that the contribution
of this segment to topline has gone up in the last one-year from 13 to 17 We
expect its contribution to go up to 20 once the new plant is commissioned by at
the end of this fiscal
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
6
Evaluation and Outlook
The company has over the years evolved from being a mere pressure cooker brand to a
full-fledged kitchen appliances brand Its wide product portfolio and wide spread retail
initiative will help company to grow faster than the industry
The pressure cooker industry which has a penetration of mere 36 in India has a lot of
scope of growth While the non-stick cookware segment will grow on the back of rising
urbanization amp growing health conscious trends We believe the macro
demographic trends in India will definitely drive the growth of the kitchen appliance
industry
TTK is one of the leading players in the Indian kitchen appliances industry
The company has seen topline growth of more than 20 over the last 5 years
with profitability also improving The company‟s increased profitability are set to
improve its cashflows as the company is almost debt-free
Company expect topline amp bottomline to grow in the range of 15-17+ for the next 2-3
years Margins are set to improve on the back of product mix insourcing of
electrical appliances and lower interest cost At the current CMP (Current Market
Price) of INR 29565- the stock trades at 91x and 81x its FY10E amp FY11E EPS of
INR 325 and INR 365
Company Profile
Corporate Office
11th Floor Brigade Towers
35 Brigade Road
Bangalore - 560 025
Karnataka
Website wwwttkprestigecom
Chariman T T Jagannathan
Business Group TTK
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
7
SITUATIONAL ANALYSIS
GRAND STRATEGIES
GROWTH
Why no one will give their Prestige cooker awayhellip Prestige like other brands like Bata Godrej and Tata are part of growing up in modern India
If you think of pressure cooker Prestige is one name that will come to mind That the
brand has managed to sustain loyalty over the many years is because as T T
Jagannathan chairman of TTK group says ldquoWersquove always kept in touch with our
consumers and have constantly been innovatingrdquo
During this current financial year for instance it has launched a variety of products one
being Prestige Deluxe cooker that has a pressure indicator which the chairman says is a
result of customer research which indicated that cooks wanted to know when the cooker
could be opened Recently the group forayed into modular kitchens and launched its
trendy Prestige Smart Kitchen across major cities There are 100 such stores planned
Prestige started the chain of exclusive franchise stores with the following objectives To
create a retail ambience for kitchenware and showcase the vast range the brand has to offer
This was not happening in the multibrand traditional kitchenware outlet that was cramped and
far below expectations of the fast-changing customer
TTK also wanted to have a one-on-one contact with the end consumers to understand their
needs better and to rekindle interest in an otherwise low-involvement category The long-term
vision is to be the country‟s number one small appliance kitchenware company so they had
to move on from being just a pressure cooker company to a cookware company
There is very little differentiation in the category - beyond inner lid and outer lid and stainless
steel and aluminium - and despite some innovations like the Prestige Smart range of cookers
launched last year the urban market is almost saturated with some numbers only in the add-
on replacement and gift segments The rural market while largely unpenetrated remains the
preserve of unbranded products which account for roughly 40 per cent of the value share of
the total market besides most villagers still use firewood Kalro Senior Vice-President
(Marketing) says When more and more people have LPG in rural areas the first thing they
will do hopefully is buy a pressure cooker
Penetration of pressure cookers in the domestic urban market is very high and the future
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
8
growths have to come from rural households There are rural households who have disposable
incomes but the impulse to buy pressure cookers or other kitchenware has not been generated
due to inadequate distribution reach The company opened two Prestige Smart Kitchen outlets
in rural areas in Karnataka during the year under report and both the outlets have been
drawing good foot falls and are delivering good sales volume TTK Group has drawn up a
strategy for rural retail foray to deliver all the products of the group relevant to the rural
customer If this strategy works out well the Company will be a major supplier to these stores
This will be in addition to TTKs stand alone rural smart kitchen outlets
The company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established across the
length and breadth of the country TTKs proposed new ERP implementation will further
improve the internal controls
TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification
and the PED CE certification by TUV Germany TTK Prestige Ltd is listed on both BSE amp
NSE The company presently has manufacturing set-ups in Hosur Coimbatore and Bangalore
and 19 sales branches located across the country to cater to the needs of specific markets
Over the last few years modern retail formats like large format stores malls super markets
and hypermarkets have started attracting huge foot falls especially in the urban areas Some of
these outfits belong to one or more national chains They cater to a variety of customer
segments at several price points While this modern format currently covers hardly 3 of the
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
9
retail business this share is likely to become significant in the coming years especially in the
urban areas The company is in the process of ensuring its presence significantly in these
modern format stores
The Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing The dealer network which
has been largely supporting the traditional product categories consisting of pressure cookers
and cookware is now stocking a larger range of TTKs products and the dealers are keen to
increase the shelf space of its products
TTK witnessed a decline in the export sale during the current year especially in the US
market However the sales in the non US markets are encouraging There is a moderate
growth opportunity for pressure cookers in the non US markets As pressure cooker is not a
significant part of kitchen appliance market in USA the company is looking at opportunities
for tapping the high end cookware market in USA If this opportunity can be exploited then it
affords an opportunity to increase the distribution for pressure cookers also in this market As
the domestic economy is growing rapidly TTK will be committing larger resources to the
domestic market and hence export opportunities will be considered only step by step to
optimize the overall earnings of the company
FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital The company was
able to finance its growth through internal accruals without increasing debt
capital It may be noted that over the last three years prior to the year under
report TTK reduced its debt burden by over Rs20 crores There was a further
reduction in the interest burden as compared to the previous year by about
Rs86 lakhs The interest cost as a percentage to sales has dropped from 84
two years back to 24 during the year under report
INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by
investing
Rs441crores During the first quarter of 2005-06 the investments made in TTK Services Private Ltd
was also encashed which brought in cash of Rs130 crores With this TTK has dealt
with all its unrelated investments
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
10
EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year ie April 2008 commenced
commercial production of pressure cookers in the new facility created at Myleripalayam
Village near Coimbatore The capacity has been established by adding new machinery as well
as transferring machinery that has been rendered surplus in the Bangalore facility As
mentioned in the earlier director‟s reports pursuant to right-sizing the Bangalore Unit is
being used a stand by unit as part of supply chain optimization measures This standby use
will be phased out during the next twelve months
TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in the
State of Utharanchal This unit will manufacture all types of pressure cookers and
cookware Facility for assembly of other domestic kitchen appliances will also be
incorporated in this unit As the demand for company‟s products exist in northern India a
manufacturing facility in the North affords logistical advantages and incidental cost savings
Further a unit established in the notified areas in the State of Utharanchal is also entitled to
excise duty exemption and income tax concession for a period of 10 years This unit is
expected to commence commercial production during the course of the financial year 2009-
2010
All the above initiatives together with normal capital expenditure will result in a capital
expenditure spend of over Rs20 crores spread over the financial years 2009-10 and 2010-11 The Public Deposits aggregated to Rs310 lakhs as on 31st March 2008 There were no
unclaimed deposits which remained unpaid as on that date
As stated earlier the manufacturing activity in the Bangalore Unit will be phased out during
the course of next 12 months and the land therein admeasuring around 285 lakh square feet
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
11
will become available for development The Board has a massive opportunity to take
appropriate decisions in dealing with this property in the best interests of the shareholders to
ensure considerable revenue windfall
DEVELOPMENTS IN HUMAN RESOURCES
The direct employment strength stood at 724 as compared to 708 in the previous year
Improved training and development programmes are in place to achieve improved
productivity in all departments Industrial relations were cordial throughout the year Your
company maintained its morale of human resource at the highest level which enabled the
growth possible The long term settlement with the union in the Hosur manufacturing
complex expires during
the financial year 2008-09 The directors must work toward concluding a settlement with
more thrust on employee productivity
THREATS
In the domestic market the threat continues to be from the mushrooming unorganized players
and regional brands These have two impacts namely commoditization of product categories
and unrealistically low pricing Though there is high mortality of these players they tend to
impair the rapid growth of quality conscious branded players by putting their legitimate
margins under pressure As has been the policy the company continues to invest in
innovation feature and value addition customer education and brand promotion to stay above
these unorganized players
The company operates in a single segment-Kitchen Appliances The products include
Pressure Cookers Non-stick Cookware Kitchen Electrical Appliances and Gas Stoves
although the company‟s revenue is still dominated by Pressure cooker sales The company
needs to be less dependant on one product by aggressively promoting amp consolidating rest of
its kitchenware products in the segment
2007-08 2006-07
Domestic Export Total Domestic Export Total
Pressure
Cookers
12249
1481
13730
9717
2463
12180
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
12
Non-stick
Cookware
3542
32
3574
2424
43
2467
Kitchen
Electric
Appliances
2163
2163
1136
--
1136
Gas Stoves 2254 2254 1766 -- 1766
Others 1375 87 1462 1336 52 1388
Total 21583 1600 23183 16379 2558 18937
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
13
In the export market the influx of cheaper supplies from China continues to put pressure on margins
as well as expansion of sales
Alternatives to combat these very problems are as follows
Option
1 Launch large-scale promotions to make consumers aware of advantages
of branded kitchenware appliances
2 Employ cost-cutting methods to further lower prices especially during recessionary
pressure
3 Investing more heavily in Research and Development so as to make more innovative
products to compete better
PORTFOLIO ANALYSIS FOR TTK PRESTIGE One of the most popular aids to developing corporate strategy in a multibusiness corporation
is the portfolio analysis Portfolio analysis is the wide set of tools to analyze elements of a
firms product mix to determine the optimum allocation of its resources Two most common
measures used in a portfolio analysis are market growth rate and relative market shareIn
portfolio analysis top management views its product lines and business units as a series of
investments from which it expects a profitable return The product linesbusiness units form a
portfolio of investments that top management must constantly juggle to ensure the best return
on the corporations invested money Two of the most popular approaches are the BCG
growth share matrix and the GE business screen The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product
lines This helps the company allocate resources and is used as an analytical tool in brand
marketing product management strategic management and portfolio analysis Each of the
corporations product lines or business units is plotted on the matrix according to the 1gt
growth rate of the industry and 2gt its relative market share Placing products in the BCG
matrix results in 4 categories in a portfolio of a company
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
14
1 Stars (=high growth high market share) - use large amounts of cash and are leaders in the business so they should also generate large
amounts of cash
- frequently roughly in balance on net cash flow However if needed any attempt should be
made to hold share because the rewards will be a cash cow if market share is kept
2 Cash Cows (=low growth high market share) - profits and cash generation should be high and because of the low growth investments
needed should be low Keep profits high
- Foundation of a company 3 Dogs (=low growth low market share)
- avoid and minimize the number of dogs in a company
- beware of expensive bdquoturn around plans‟
- deliver cash otherwise liquidate
4 Question Marks (= high growth low market share)
- have the worst cash characteristics of all because high demands and low returns due to low
market share
- If nothing is done to change the market share question marks will simply absorb great
amounts of cash and later as the growth stops a dog
- Either invests heavily or sells off or invest nothing and generate whatever cash it can
Increase market share or deliver cash
MARKETS The markets of prestige products can be mainly divided on the basis of some
common characteristics into urban markets and rural markets Although the urban markets
are mostly saturated with low growth rates in the pressure cooker segment the rural
market is experiencing a rapid double digit growth rate with the penetration into rural
households being
the hope for this segment TTK prestige forayed into the rural markets in FY 06 in
the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the
retail outlets The modular kitchen and the electrical appliances markets are experiencing
a high growth rate in the urban markets The non stick cookware segment is one in which
prestige has a strong position and although the urban market is saturated the rural market is
growing at
a high rate
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
15
Thus in the BCG matrix the products of TTK Prestige can be divided into stars question
marks cash cows and dogs according to the markets in which they are in ie according to the
urban and rural markets
URBAN MARKETS
STARS NONE
QUESTION MARKS Electrical appliances modular kitchens CASH COWS pressure cookers non-stick cookware
DOGS Gas stoves
RURAL MARKETS STARS Pressure cookers electrical appliances modular kitchens non stick cookware gas
stoves
QUESTION MARKS none CASH COWS none
DOGS none
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
16
BCG MATRIX FOR TTK PRESTIGE URBAN MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET STARS
Electrical
appliance
s
ppliances
sss
GROWTH
LOW C CASH
Modular
kitchens
QUESTION MARKS
Pressure
cookers
CASH COWS
Non
stick
cookwar
Gas stoves
DOGS
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
BCG MATRIX FOR TTK PRESTIGE RURAL MARKETS
HIGH
RELATIVE
MARKET SHARE
LOW
HIGH
MARKET
GROWTH
Pressure
cookers
Modular
kitchen
QUESTION MARKS
Non
stick
cookwa
Gas
stoves
STARS
LOW CASH COWS
DOGS
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
GE MATRIX FOR TTK PRESTIGE
In consulting engagements with General Electric in the 1970s McKinsey amp
Company developed a nine-cell portfolio matrix as a tool for screening GEs large
portfolio of strategic business units (SBU) This business screen became known as the
GEMcKinsey Matrix
The GE McKinsey matrix is similar to the BCG growth-share matrix in that it maps
strategic business units on a grid of the industry and the SBUs position in the
industry The GE matrix however attempts to improve upon the BCG matrix in the
following two ways
The GE matrix generalizes the axes as Industry Attractiveness and
Business Unit Strength whereas the BCG matrix uses the market growth rate
as a proxy for industry attractiveness and relative market share as a proxy for
the strength of the business unit
The GE matrix has nine cells vs four cells in the BCG matrix
Industry attractiveness and business unit strength are calculated by first identifying
criteria for each determining the value of each parameter in the criteria and
multiplying that value by a weighting factor The result is a quantitative measure
of industry attractiveness and the business units relative performance in that
industry
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
19
COMPETETIVE STRENGTH
MARKET ATTRACTIVENESS
HIGH MEDIUM LOW
HIGH PRESSURE COOKERS
NON STICK COOKWARE
MEDIUM MODULAR KITCHENS
ELECTRICAL APPLIANCES
GAS STOVES
LOW
Criteria for market attractiveness
Size of market
Market rate of growth
Nature of competition and its diversity
Profit levels
Ability to differentiate
Impact of technology the law and energy effeciency
Criteria for competitive strength
Market share
Management profile
R amp D
Quality of products and services
Branding and promotions success
Place (or distribution)
Brand loyalty
Efficiency
Cost reduction
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
20
ADLITTLE MATRIX FOR TTK PRESTIGE
The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on
strategy formulation ADL has two main dimensions - competitive position and industry
maturity
Competitive position is driven by the sectors or segments in which a Strategic Business Unit
(SBU) operates The product or service which it markets and the accesses it has to a range of
geographically dispersed markets that are what makes up an organizations competitive
position ie product and place
Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be
renamed an industry life cycle Of course not only industries could be considered here but
also segments
It is a combination of the two aforementioned dimensions that helps us to use ADL for
marketing decision-making Now lets consider options in more detail Competitive position
has five main categories
Dominant - This is a particularly extraordinary position Often this is associate with some
form of monopoly position or customer lock
Strong - Here companies have a lot of freedom since position in an industry is
comparatively powerful
Favourable - Companies with a favourable position tend to have competitive
strengths in segments of a fragmented market place No single global player controls all
segments Here product strengths and geographical advantages come into play Tenable - Here companies may face erosion by stronger competitors that have a
favourable strong or competitive position It is difficult for them to compete since
they do not have a sustainable competitive advantage
Weak - As the term suggests companies in this undesirable space are in an
unenviable position Of course there are opportunities to change and improve and
therefore to take an organization to a more favourable strong or even dominant
position
From here the strategic position of an organisation can be established Managers then need to
decide upon the best strategic direction for the business For example they might use a Gap
Analysis According to ADL there are six generic categories of strategy that could be
employed by individual SBUs Market strategies
Product strategies
Management and systems strategies
Technology strategies
Retrenchment strategies
Operations strategies
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
21
STAGES OF INDUSTRY GROWTH
COMPANYrsquoS
COMPETITIV
E POSITION
EMBRYONIC GROWTH MATURITY AGEING
DOMINANT PRESSURE
COOKER
STRONG NON STICK
COOKWARE
FAVOURABL
E ELECTRICAL
APPLIANCES
GAS
STOVES KITCHEN
ACCESORIES
TENABLE MODULAR
KITCHEN
WEAK
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
22
Porterrsquos 5forcesmodel-
Porter referred to these forces as the micro environment to contrast it with the more general
term macro environment They consist of those forces close to a company that affect its
ability to serve its customers and make a profit A change in any of the forces normally
requires a business unit to re-assess the marketplace given the overall change in industry
information The overall industry attractiveness does not imply that every firm in the industry
will return the same profitability Firms are able to apply their core competencies business
model or network to achieve a profit above the industry average A clear example of this is
the airline industry As an industry profitability is low and yet individual companies by
applying unique business models have been able to make a return in excess of the industry
average
Porters five forces include three forces from horizontal competition threat of substitute
products the threat of established rivals and the threat of new entrants and two forces from
vertical competition the bargaining power of suppliers and the bargaining power of
customers
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
23
The threat of substitute products or services
The existence of products outside of the realm of the common product boundaries increases
the propensity of customers to switch to alternatives
Buyer propensity to substitute
Relative price performance of substitute
Buyer switching costs
Perceived level of product differentiation
Number of substitute products available in the market
Ease of substitution Information-based products are more prone to substitution as
online product can easily replace material product
Substandard product
Quality depreciation
The threat of the entry of new competitors
Profitable markets that yield high returns will draw firms This results in many new entrants which
eventually will decrease profitability Unless the entry of new firms can be blocked by incumbents
the profit rate will fall towards a competitive level (perfect competition)
The existence of barriers to entry (patents rights etc)The most attractive segment is one
which entry barriers are high and exit barriers are low Few new firms can enter and non-
performing firms can exit easily
Economies of product differences
Brand equity
Switching costs or sunk costs
Capital requirements
Access to distribution
Customer loyalty to established brands
Absolute cost advantages
Learning curve advantages
Expected retaliation by incumbents
Government policies
Industry profitability the more profitable the industry the more attractive it will be to new
competitors
Internet era today competitors need only a website to enter a market
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
24
The intensity of competitive rivalry For most industries the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry
Sustainable competitive advantage through innovation
Competition between online and offline companies click-and-mortar -v- brick-and-
mortar
Level of advertising expense
Powerful competitive strategy used by a company which can intensify competitive
pressures on their rivals
How will competition react to certain behavior by another firm Competitive rivalry is likely
to be based on dimensions such as price quality and innovation Technological advances
protect companies from competition This applies to products and services Companies that
are successful with introducing new technology are able to charge higher prices and achieve
higher profits until competitors imitate them Examples of recent technology advantage in
have been mp3 players and mobile telephones Vertical integration is a strategy to reduce a
business own cost and thereby intensify pressure on its rival
The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs the ability of
customers to put the firm under pressure which also affects the customers sensitivity to price
changes
Buyer concentration to firm concentration ratio
Degree of dependency upon existing channels of distribution
Bargaining leverage particularly in industries with high fixed costs
Buyer volume
Buyer switching costs relative to firm switching costs
Buyer information availability
Ability to backward integrate
Availability of existing substitute products
Buyer price sensitivity
Differential advantage (uniqueness) of industry products
RFM Analysis
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
25
The bargaining power of suppliers The bargaining power of suppliers is also described as the market of inputs Suppliers of raw
materials components labor and services (such as expertise) to the firm can be a source of
power over the firm when there are few substitutes Suppliers may refuse to work with the
firm or eg charge excessively high prices for unique resources
Supplier switching costs relative to firm switching costs
Degree of differentiation of inputs
Impact of inputs on cost or differentiation
Presence of substitute inputs
Supplier concentration to firm concentration ratio
Employee solidarity (eg labour unions)
Supplier competition - ability to forward vertically integrate and cut out the buyer
New entrants
Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils
The threat of new competitors is one of the forces of Porter‟s model which in this case is less
because of the cost advantage they provide to their customers on various sizes available in the
market It has established superior production operations and processes due to experience
patents and exercise huge control on particular inputs required for production such as labor
materials equipment or management skills On the other hand new entrants would have to
undertake huge capital investment to build out their networks and match the scale advantage
of established companies This is especially true as Prestige Cooker is already in fierce
competition with other more established brands like Hawkins kanchan Jaipan Increasing
urbanization and fast-changing demographics have led to a growing demand for additional
homes which in turn have increased demand for kitchen appliances TTK Prestige has
evolved from a pressure cooker company to a total kitchen solution provider It has
refurbished its product portfolio by introducing gas stoves mixer-grinders domestic kitchen
appliances non-stick cookware chimneys hobs and modular kitchen solutions
Competitive Rivalry
The competitive struggle is fought through price advertising and promotion spending and
direct selling efforts Prestige Cooker is affecting its rivals by its price and the technology of
being balanced cookers all through the world containing aesthetic styles and better
technology efficient TTK controls more than 60 of the pressure cooker market thus actions
of other companies affect the market share of it but the growing need for cookers tend to
moderate competition by providing scope for growth to the company Thus fierce competition
does exist but at the moment Prestige with its variety of ranges seems to have advantage of
price distribution perceived quality and thus market share TTK Prestige pioneered the
concept of pressure-cooking in India It has introduced many new concepts in pressure
cookers like new shapes non-stick pressure cookers and pressure indicator which have now
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
26
become standards for other manufacturers which makes difficult for other competitors for
rivalry
Bargaining power of buyers
When the buyers purchase in large quantities then buyer can use their purchasing power as
leverage to bargain for price reductions The switching costs are low so buyers can play off
the supplying companies against each other to force down prices As mentioned earlier the
retail chains are exercising sufficient power over major brands of cookers Prestige at present
has many outlets the company has entered the fast growing retail space with its exclusive
bdquoSmart Kitchen‟ outlets which has helped in boosting brand image and demand TTK
Prestige is aggressively expanding the number of exclusive outlets which is expected to go
up from 164 in 92 towns to over 200 outlets by the end FY07 The change in the family
structure in India is clearly reflected in the reducing number of persons per household which
has fallen from 57 persons in 1971 to 53 in 2001 Going forward we expect the trend
towards nuclear families to intensify with the average number of people in a household set to
fall to 51 by 2011India is also fast moving from an agriculture-based to a services-driven
economy
Bargaining power of suppliers
Suppliers are weak as the company has the opportunity to force down input prices and higher
quality inputs TTK Prestige is having a huge turnover nearly half of which comes from its
pressure cooker so it could threaten to enter the suppliers industry and make the inputs as a
tactic to lower down the prices of the input
Also it must be remembered that TTK not only has its manufacturing plants but also the
capability of importing with research and development units as for the urban woman
whether she is a working woman or a housewife the pressure cooker has become
indispensable The trend of pressure cooker has grown so widely that people from rural are
also using the pressure cookers as even the government is stressing upon these people to use
pressure cookers so that usage of liquid petroleum gas can be lessened Its varied variety and
its design which are very common and known to many people makes usability very easy
which tends the people to purchase also for its long time sustainable in the market makes
them the first priority to purchase
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
27
Threat of substitutes TTK Prestige cooker provides cookers with different sizes like pressure cooker pressure
kadai pressure handi etc therefore the threat of having substitute is reduced as customer can
buy according to his own preference within the same brand Also for the price conscious
customer who might migrate to cheaper TTK prestige cooker has low range or the low cost
brand variant Some brand concern persons who think that prestige cooker pressure is a low
class cooker might shift to other brands like Hawkins kanchan or Jaipan as these come with
some very good western aesthetic designs The threat is minimal as Prestige has some
flamboyant designs where all the utensils and other cookware are matched with to increase
the uniqueness
PESTLE [Political Economic Social Technological Legal and
Environmental Profile]
PESTLE analysis factors are Political Economic Sociological Technological Legal and
Environmental The PESTLE analysis examines each factor to assess what their impact or
potential impact on the organization In this way they can prepare strategically for any
changes that need to be made in the organization or simply to have the awareness of the
external market to give them a competitive edge over other firms in the industry Examples
of each PESTLE analysis factor are
Political what is happening politically with regards to tax policies employment laws
trade restrictions tariffs
Economic what is happening within the economy ie economic growth decline
minimum wage unemployment (local and national) credit availability cost of living
etc
Sociological what are occurring socially ie cultural norms and expectations health
consciousness population growth rate career attitudes
Technological new technologies are continually being developed There are also
changes to barriers to entry in given markets
Legal changes to legislation This may impact employment access to materials
resources imports exports taxation etc
Environmental what is happening with respect to ecological and environmental
aspects
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
28
EXTERNAL
FACTORS
EXTERNAL FACTORS AFFECTING ORGANISATION
POLITICAL GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF
PRESSURE COOKERS
ECONOMIC INFLATION RECESSION DOWNTURN COST OF INPUTS
SOCIAL URBAN INDIA TRENDS TO EAT OUTSIDE
TECHNOLOGICAL ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN
BE TRANSFERED
LEGAL MANTRAA- VARIANT OF COOKER WHICH IS EXPORTED TO US AND
LESS LAYOFF AT THE TIME OF RECESSION
ENVIRONMENTAL STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT
QUALITY AND OTHER METALLURGICAL MEASURES
Competitive Advantage Profile [CAP] of TTK Prestige Pressure
Cooker brand in India
TTK Prestige pioneered the concept of pressure-cooking in India It has introduced
many new concepts in pressure cookers like new shapes non-stick pressure cookers
and pressure indicator which have now become standards for other manufacturers
Over the years it has launched many unique and innovative products
TTK which was only into cookware now has around 33 of its revenues coming from
kitchen appliances
Company recognizes the immense value of its traditional dealer network Owing to a
dynamic trade policy which affords satisfactory return on investment to the dealer the
contribution through traditional dealer network is also growing
Penetration of pressure cookers in the domestic urban market is very high and the
future growths have to come from rural households There are rural households who
have disposable incomes but the impulse to buy pressure cookers or other kitchenware
has not been generated due to inadequate distribution reach
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
29
The company is also into the modular kitchen segment which is the single largest
brand
The company‟s current installed capacity in pressure cookers is 40 lakh units But as it
is running only at 50 per cent of its capacity there is room for scaling up production
with demand expected to rise in the coming years The company will enjoy higher
revenues as the market grows in size with no additional capexinterest
Company is continuously improving the internal control system in all the areas of
operation including the effective monitoring of Prestige Smart Kitchens established
across the length and breadth of the country Company‟s proposed new ERP
implementation will further improve the internal controls
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
30
SWOT analysis SWOT Analysis is a strategic planning method used to evaluate the Strengths Weaknesses
Opportunities and Threats involved in a project or in a business venture It involves
specifying the objective of the business venture or project and identifying the internal and
external factors that are favorable and unfavorable to achieving that objective A SWOT analysis must first start with defining a desired end state or objective A SWOT
analysis may be incorporated into the strategic planning model
Strengths attributes of the person or company that is helpful to
achieving the objective
Weaknesses attributes of the person or company that is harmful to
achieving the objective
Opportunities external conditions that is helpful to achieving the
objective
Threats external conditions which could do damage to the objective
Identification of SWOTs is essential because subsequent steps in the process of planning for
achievement of the selected objective may be derived from the SWOTs
First the decision makers have to determine whether the objective is attainable given the
SWOTs If the objective is NOT attainable a different objective must be selected and the
process repeated
Matching and converting
Another way of utilizing SWOT is matching and converting Matching is used to find
competitive advantages by matching the strengths to opportunities Converting is to apply
conversion strategies to convert weaknesses or threats into strengths or opportunities An
example of conversion strategy is to find new markets If the threats or weaknesses cannot be
converted a company should try to minimize or avoid them
Internal and external factors
The aim of any SWOT analysis is to identify the key internal and external factors that are
important to achieving the objective These come from within the companys unique value
chain SWOT analysis groups key pieces of information into two main categories
Internal factors ndash The strengths and weaknesses internal to the
organization
External factors ndash The opportunities and threats presented by the
external environment to the organization
The internal factors may be viewed as strengths or weaknesses depending upon their impact
on the organizations objectives What may represent strengths with respect to one objective
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
31
may be weaknesses for another objective The factors may include all of the 4Ps as well as
personnel finance manufacturing capabilities and so on The external factors may include
macroeconomic matters technological change legislation and socio-cultural changes as
well
as changes in the marketplace or competitive position The results are often presented in the
form of a matrix
SWOT analysis is just one method of categorization and has its own weaknesses For
example it may tend to persuade companies to compile lists rather than think about what is
actually important in achieving objectives It also presents the resulting lists uncritically and
without clear prioritization so that for example weak opportunities may appear to balance
strong threats
SWOT ANALYSISOF PRESTIGE
S (Strength)
1 The product is treated as a matter of prestige which gave good brand image
2 Pioneers in this industry
3 Prestige has the largest range of pressure cookers in the country
4 with years of trust reliability and safety as our hallmarks
5 Price of these cookers ranges in all income group people
6 Customers review
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
32
W (weakness)
1 Unable to reach huge sales volume
2 Lacking in high diversified segmentation
3 Hawkins provide neck to neck competition in terms of market share 4 No innovative marketing strategy been adopted so as grab the market
O (Opportunities)
1 Currently the season which is going begin is marriage season so new families form they
can target those customers in bulk pack
2 They are declining the direct promotion to attain good market
3 Capture the range of market namely low-medium users
4 They have mudra communications as their marketing agent which is a good opportunity to
explore
5 Safety techniques like Gasket Release Systemrdquo and the ldquoGasket Offset Devicerdquo add points
in safe use for beginners
T (Threats)
1 Competitors future cookers are being planned to manufacture with Anodized aluminum
2 Wide range of availability of competitors products
3 The expected moving of high income group towards the black berry of Hawkins is nearly
threat
4 Launching of anodized cookers in front challenge before all pressure cookware
5 Unbranded cookers in market are swallowing 50 percent of market share
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
33
VALUE CHAIN ANALYSIS
The value chain is a systematic approach to examining the development of competitive
advantage It was created by M E Porter in his book Competitive Advantage (1980) The
chain consists of a series of activities that create and build value They culminate in the total
value delivered by an organization
Primary Activities
Inbound Logistics Here goods are received from a companys suppliers They are stored until they are needed on
the productionassembly line Goods are moved around the organisation
Operations This is where goods are manufactured or assembled Individual operations could include
room service in an hotel packing of booksvideosgames by an online retailer or the final
tune for a new cars engine
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
34
Marketing and sales
In true customer orientated fashion at this stage the organization prepares the offering to
meet the needs of targeted customers This area focuses strongly upon marketing
communications and the promotions mix
Service This includes all areas of service such as installation after-sales service complaints handling
training and so on
INBOUND LOGISICS
MARKETING AND SALES The dealers and distributors played a very important role in success of prestige The dealers
and distributors are dealing with the prestige products alone
Prestige strongly believes in trade partners and is committed to strengthen them and prepare
them for the challenges ahead With the current trend of organized retail growing prestige
believes as the leader in the segment They educate and instigate change in the trade partners
and help them get to next level
Prestige smart kitchens have been one of the most innovative marketing moves by prestige
PSK was conceptualized to do three things To improve the visibility in terms of display the
entire range of products to improve the distribution of our new products and to offer the
customer right ambience to shop and educate and communicate the right things about
prestige
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
35
After three years of successful operation and over 100 stores PSK today offers that edge
over the competition which cannot be replicated Besides the three benefits that PSK
offered contributes 12 of the revenue It has prepared to take the challenges of organized
retail
PSK has instigated the nearby traders to keep the entire range of products The same traders
were not ready to stock and sell the entire range This has actually resulted in prestige
increasing its market share for its entire range in that area dramatically
They have plans to expand the stores across the country The concentration would be on the
tier 11 cities in south India and tier 1 in non south markets By the end of this fiscal they shall
be 400 in numbers with 80000sqft of retail space
Outbound Logistics The goods are now finished and they need to be sent along the supply chain to wholesalers
retailers or the final consumer
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
36
SERVICE
The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968
when we started in a little shop in West Perth Western Australia With a devotion to a
quality service to our customers our business has expanded to the point of supplying pressure
cookers now on a daily basis to all corners of Australia New Zealand various countries
throughout SE Asia (including Thailand Philippines Malaysia Indonesia) and beyond and
spare parts to all corners of the world The little store now in Subiaco WA still provides
the personal friendly service that helped us grow to a truly National dimension
We specialize in Pressure Cookers and their Spare Parts and have sourced quality products
from around the world (several brands are exclusive to the Pressure Cooker Centre) so that
we can offer you a complete choice of quality pressure cookers for all budgets
We also carry a select range of quality kitchenware and kitchen accessories so that we can
offer you world renowned top-of-the-range cookware and kitchenware You will find a large
range of SILAMPOS saucepans stockpots frypans steamer sets and double boilers This
top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the
finest 1810 stainless steel and is imported directly from Portugal The Silampos cookware
range is of excellent quality design and finish and is offered to our customers at the lowest
retail prices We also offer exclusive to Pressure Cooker Centre the top quality SILIT
cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof
coating and ZWILLING HENCKELS knives also from Germany and much more Goto
Kitchenware
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
37
STRATEGIC ALTERNATIVES SOLUTIONS
The main issues for Prestige pressure cookers are regarding the threat from other kitchen
ware products ensuring growth in kitchenware market differentiating its products further so
as to fend off competition
Alternatives to combat these very problems are as follows
Option 1 Launch large-scale promotions to make consumers aware of advantages of
variant pressure cookers released by prestige
2 Employ cost-cutting methods to further lower prices while discontinuing
unsustainable products
3 Investing more heavily in Research and Development so as to make more
innovative products to compete better
4 With the improved research and development EXPORTING to USA according to
their standards may prove to be advantageous
Recommended Strategy
In spite of all the aforementioned strategies would help Prestige compete grow and sell
better the best option for now would be to employ cost-cutting methods to decrease prices
further This would not only ward off the significant competition from other players like
Hawkins Jaipan and Kanchan but would also help in wooing the 80 of the consumers of
India who rely on pressure cookers It is our understanding that the vast rural sectors
subscribe most to the cookers as they are seen to be cheaper and efficient than normal
cooking methodology By employing cost-cutting methods this price difference and the
associated perception can be bridged to increase Prestige market share It is also imperative
for the brand to discontinue the products in its portfolio that are not doing well Pouring
money into promotion of products that aren‟t selling in the market is unwise Increase in sales
and market share while further cutting down costs is also likely to increase TTK Prestige
Pressure cooker profit margins which at the moment is a luxury that none of the competing
others players enjoy Similarly with more revenue the rest of the strategies and alternatives
can be easily implemented post evaluation to find the best practices to make TTK Prestige
growth in India both sustainable and profitable
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
38
Conclusion
By studying products of TTK Prestige India specifically its cooker brand we have been able
to analyze the brand the value it has created the products the variants the problems faced
specifically by the brand and those faced by the industry as a whole in recent times We have
been able to evaluate to an extent the strategies that are conspicuous to us while noting
whether implementing these strategies have helped Prestige or not In light of our study we
have been able to formulate certain solutions to the issues identified by us while
recommending the most suitable on for a variety of reasons All in all it is certain that
Prestige brand of pressure cookers backed by the parent company TTK Ltd is here to stay
and its market share is only bound to soar with the definite shift towards packaged cookers by
the rural and urban population given to the growing density
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html
39
REFRENCES
TTK_Prestige-Techno_Research_Report Pdf TTK Prestige reportpdf
wwwprestige cookwareState-of-art-Microwave-ovens-
launched-by-TTK-Prestigehtml wwwa-review-of-the-royal-prestige-hy-cite-corp-income-
opportunity-579302com wwwannual-report-ttk-prestige-2008-2009html
httpwwwprestigesmartkitchencom
httpwwwmouthshutcomproduct-
reviewsPrestige_Pressure_Cooker-925003557html httpcorporategiftseasy2sourcecomttkprestigeproductpr
ofile2htm httpwwwthehindubusinesslinecomiw20091019stories2
009101950210400htm httppressure-cookersblogspotcom200905prestige-
pressure-cooker-cheap-solutionhtml wwwhawkinscookerscomdownloadspc_catalogpdf
httpwwwreviewstreamcomreviewsp=25542
httpwwwamericanchroniclecomarticlesview105565
httpwwwreviewcentrecomproducts2171html