COMMERCIAL VEHICLES INDUSTRY Mahindra organization

Summary After registering a strong 30%+ growth over the past two fiscals, the growth in the Commercial Vehicle (CV) industry has somewhat slowed down during the current year. During April-November 2011, the domestic CV industry posted a growth of 20.0% on YoY basis riding on a strong 29.3% growth in LCVs and a fairly muted 9.4% in M&HCVs. Steadily rising interest rates, contracting industrial output and a considerable increase in vehicle prices coupled with high-base effect of previous years are the main factors impacting growth. The operating environment for fleet operators has been deteriorating over the past six months. All factors that influence the viability appear to be weighing against the profitability and cash flows of operators. The sharp rise in overall cost of ownership combined with considerable rise in operating costs and an almost stagnant freight rates in a confluence are displaying signs of pressures on fleet operators. Our channel check suggests that several operators have postponed their expansion plans in view of rising interest rates and expectation of slowing industrial growth. Capacity utilisation is gradually declining and freight rates continue to remain stagnant despite rise in operating expenditure for operators. On the financing front, some of the financiers have also started tightening lending norms in addition to the rise in interest rates. Overall, the near term risks against M&HCV demand has increased significantly, though structurally, the demand over a longer period remains intact, subject to normalization of economic activity over the next 2-3 quarters. Given the current environment where the growth in industrial activity is at a two year low and the operating environment for fleet operators is gradually weakening, we expect the industry to defer capacity addition. As a result, the outlook for the near term appears to be subdued, resulting in a slowdown in new vehicle sales. Among segments, M&HCVs which tend to be more influenced by the macro-economic indicators is likely to register a weaker performance over the near term as against the steadily growing LCV segment. The proliferation of the

hub-n-spoke model, improving last mile connectivity and last but not the least the strong demand originating from rural segment is likely to drive demand in the LCV segment over the medium term. We expect the M&HCV industry to grow by 3-4% in FY12 and LCV industry by 17-18% in FY12. We maintain our long-term growth outlook for M&HCV with a CAGR (%) of 9.5-11.5% and for LCV with CAGR of 11-13% over the next five years. In terms of the competitive landscape, while some of the established but smaller OEMs have expanded their product portfolios and market coverage, the competition from new players is unlikely to hurt the strong market position of incumbents in the near term as the former go through a phase of developing credible track record for their products and create market reach, an imperative for the CV industry.

Table 1: Segment-wise Volumes YoY Growth (%) volumes Segments FY08 FY09 FY10 FY11 FY12e FY08 FY09 FY10 FY11 * M&H 274,5 183,4 244,9 322,7 332,4 -7.0% 43.4% 22.9% CVs 82 95 44 88 72 12.6% LCVs 215,9 200,6 287,7 353,6 413,7 -0.4% 33.5% 31.8% 12 99 77 20 35 33.2%

FY1

3-4

1718%

FOOD INDUSTRY Reliance Fresh

INDIA'S $182-BILLION food processing industry has been growing at over 13 percent despite the global slowdown. And now the government is aiming to double the turnover in the next five or six years by setting up mega food parks to attract global capital.The vision: Bring about a three-fold growth in the size of

the country's food processing business, increase the level of processing perishables from six percent to 20 percent, raise the value addition from 20 percent to 35 percent and increase India's share in the global food trade from 1.5 percent to three percent. "We have seen the revolutions in the information technology and biotechnology. I now feel the time has come for a revolution in food technology," said Minister of State for Food Processing Subodh Kant Sahai. "People say whatever the circumstances, one will need food. So, this is one industry that will never close down," Sahai, who holds independent charge of the ministry, said in an interview. He has statistics as well to back his confidence. The country's gross domestic product (GDP) saw a decline in growth to 5.3 percent for the third quarter of this fiscal from 8.9 percent in the like period of the previous year, with both manufacturing and agriculture actually registering a decline in output. But the food processing sector continued to maintain a positive growth rate. "In the midst of the global economic meltdown and with the growth in our manufacturing sector also having fallen, the food processing industry is growing at a robust 13.7 percent today, from levels of 6.7 percent in 2004-05," said Sahai. Agreed Pradeep Chordia, chairperson of the Chordia Food Park at Shirwal in Maharashtra: "Food is an essential item. I don't think that the global recession will have any effect on the food industry in India." According to the India Food Report 2008 prepared by leading markets data provider Research and Markets, the Indian food industry was estimated at over $182 billion, accounting for about two-thirds of the country's total retail sector. "We expect this market to grow to $300 billion by 2015, which is not very far. And by 2025, it is expected to be worth $344 billion," said an official in the ministry of food processing industries.. INDIA IS THE THIRD LARGEST PRODUCER OF FOOD GRAIN AND THE SECOND LARGEST PRODUCER OF FRUITS AND VEGETABLES. INDIA'S $182-BILLION FOOD PROCESSING INDUSTRY HAS BEEN GROWING AT OVER 13 PERCENT DESPITE THE GLOBAL SLOWDOWN.

PACKED AND PROCESSED FOOD IS INCREASINGLY BECOMING POPULAR. SOME FACTS ARE WELL KNOWN AND BACK THE AMBITIOUS VISION SET BY THE GOVERNMENT: ! India is the world's largest producer of milk. ! It has the largest number of livestock in the world. ! It is the world's second largest producer of fruit and vegetables. ! It is the third largest producer of food grain. ! It has the third largest output of fish. ! It the largest producer, consumer and exporter of spices. At the same time, while processing of food to consumable standards are at levels of up to 80 percent in some developed countries, the overall processing level in India has languished at single-digit level till recently. "While the whole world was processing at 70-80 percent, we were processing just six-seven percent. Now, after four years, this has gone to 10 percent," said Sahai, adding that India's share in exports of processed food in a global market is just 1.5 percent at $3.2 billion. The main reason for this is that much of the farm and horticultural produce goes waste or farmers are compelled to dispose them of in distress sales as there is no adequate infrastructure to process and preserve the produce and especially increase its shelf life till it reaches retail stores. The wastage level of fruit and vegetables in India currently stands at a whopping 35 percent, explain ministry officials,adding it was to bring a complete turnaround to this scheme of things that the government launched the ambitious Vision 2015 programme. An essential part of the programme is the flagship Mega Food Parks Scheme, which is instilling a lot of hope among stakeholders - from agriculturists to industrialists - and 10 such projects are already in the pipeline across the country. The idea behind these parks is to make the country's farm sector more market-driven than supply-driven. In other words, farmers will need to produce what the markets demand rather than what they feel like. "Through food parks, processors will tell farmers, 'Look! this is what you will produce now since this is what is needed. We need so much of this produce every year. This is the current market rate, this was what you were getting, and this is what we will pay you'. So all sides are happy," explained the ministry official. "What we want is the farmers should get more and more market information." Each

of these parks is expected to generate 30,000 direct jobs and several times of it in indirect opportunities. Based on the success parameters of the first 10 parks, the number will be scaled up to 30 in the next five years. These initiatives are also seen opening up new opportunities for youth and that is why the government is setting up the National Institute of Food Technology Entrepreneurship and Management (NIFTEM), not far from the national capital. "Courses in the institute will start from the 2010 session," said Sahai, adding a series of laboratories for carrying out research and development work at various institutes was also in the pipeline. The minister said India's food processing industry which has the potential to attract Rs.1,000 billion ($20 billion) worth of investment, now needed to link better with the world market to achieve its full potential. "We will become the food factory of the world." Indo-Asian News Service THE INDIAN FOOD INDUSTRY WAS ESTIMATED AT OVER $182 BILLION, ACCOUNTING FOR ABOUT TWO-THIRDS OF THE COUNTRY'S TOTAL RETAIL SECTOR. ASSIGNMENT :
As the business environment is becoming ever more complex, more turbulent, more global and more competitive, thinking strategically about how a firm should position itself in order to compete successfully is becoming increasingly critical. Those firms that will survive, grow and create value are firms with a clear vision of what is their competitive advantage and ho w to maintain/ enhance it. Therefore strategic planning has become one of the core tas ks of leaders today. The other key objective of this course is to review the main concepts, methods and tools used in strategy formulation and implementation processes, identifying the business situations in which they can be applied most effectively, as well as und erstanding the limitations of various approaches. As part of the Strategic Planning module, students are required to analyze an industry and write a report on the position of the company in the future. The report must address the following 5 (FIVE) management questions:

Your findings and recommendations must be supported by: 1. Identification of the stage of life cycle of the firms industry 2. Identification of any changes taking place in the macro environment (political, legal, economic, social, cultural, technological, demographic etc.) that might have an impact upon the firms competitiveness 3. Evaluation of the organization in relation to its competitors by presenting a strategic group map of the relevant industry. 4. The detailed SWOT analysis and presentation matrix in order to identify strategies (plans) for the future of TOWS

5. Application of any other relevant strategic management framework that will make a contribution to your analysis