Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

Written Assignment / Case Front Page Format

Name: Akshay Bahety

Due Date: 07/03/2017

Class: C

Roll No: 340304

Subject: BPSM

Assignment No: 2

Marks out of
15

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Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

Introduction
Diversified company is a company that has multiple, unrelated businesses.
They are those:
(1) Require unique management expertise,
(2) Have different end customers and,
(3) Produce different products or provide different services.

Diversification happens when a business builds up another item or ventures into

another market. Regularly, organizations broaden to oversee chance by limiting potential
damage to the business amid monetary downturns.

The essential thought is to venture into a business action that doesn't adversely respond
to an indistinguishable financial downturns from your present business movement.
On
the
off

chance that one of your business ventures is taking a hit in the market, one oyour
different business endeavors will help balance the misfortunes.

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 Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

Basically I had taken two companies which diversified into other business: GMR
Infrastructure & Kesoram Industries

Different Types of Diversification Strategy are:

Horizontal Diversification
Vertical Diversification
Concentric Diversification
Heterogeneous (conglomerate) diversification
Corporate Diversification.

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Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

Gmr infrastructure
The company was founded in 1978 by Grandhi
Mallikarjuna Rao

G.M.rao a mechanic engineer in 1974 with just 3 lakh and five acres of land has
grown its assets to 39, 40,100 lakh in 2012

GMR Group is an infrastructural company headquartered in Bengaluru.

The company started with Agri-based industries like Jute, Sugar, Breweries

Now the GMR group interests lie in areas of Airports, Energy, Highways and Urban
Infrastructure

GMR Group is one of the fastest growing infrastructure enterprises in the

country with a rich and diverse experience spanning three decades.

Airports

GMR Group currently owns and operates

Delhi International Airport & Hyderabad International Airports
Developing Goas Greenfield airport at Mopa
Largest private airport company in India
Partnership with Mega wide Construction Corporation of Philippines is operating and
developing Mactan Cebu International Airport the second largest airport of Philippines.
Local Turkish partners won the rights to develop Istanbuls Sabiha Gokcen airport in 2008

Energy

It is one of the largest diversified Infrastructure Conglomerates in India

It has a balanced fuel mix of coal, gas, LSHS as well as renewable sources of wind and solar
energy

All operating units of GMR Energy hold the certifications of ISO 14001 for environment
management, OHSAS 1800 for occupational health & safety and ISO 9001 for quality
management systems.

Transportation

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Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

GMR Highways Limited was incorporated in 2006 which undertakes roads and highways
projects on DBFOT basis

mainly focuses surface transport projects including Roads, Railways, Metros and Air Strips /
Runways in both DBFOT (under GMR Highways) and EPC (under GIL EPC) Segments

The company has projects in Andhra Pradesh, Telangana, Punjab, Haryana and Tamil Nadu
states

They are currently operating 6 projects measuring to total 2068 lane kms.

Minority stakes in 3 operational projects measuring to 920 lane km

The highways operated group have one of the lowest accident and mortality rates

Urban Infrastructure

The Group is developing a 2101Ac (850 Ha) multi-product Special Investment Region (SIR)

KAKINADA Special Economic Zone: Spread over an extent of approximately 10,500 acres

The firm diversified his business because there is increase in completition which are eating away the
revenue of the business hence the firm diversified their business so that they could generate extra
profit.

GMR infra started in 1994 when the public funds raised could not be invested to start a brewery,
owing to ban on alcohol in Tamil nadu. Rao had to choose a 200 MW power plant .His strategy of
growth with strategic choice has made the company to reach a highest level of success.

The types of diversification used by the company are:

Heterogeneous (conglomerate) diversificatio n:

It involves growth strategy that involves expanding a company's business into an area, or areas,
totally unrelated to its core business.

As we have seen GMR infrastructure started with agri- Based industries like Jute, sugar and they have
all together expanded to airports, Energy, Highways, and urban infrastructure.

The advantage that they got from diversification was that there was diversification of risk over
different industries, thereby making the company less dependent on one sector. It also opens the
core company to new markets and new revenues.

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Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

KESORAM INDUSTRY

Introduction
Kesoram was founded in 1919 under
the name of Kesoram Cotton Mills Ltd.

It is under the flagship 'B K Birla Group Of

Companies'

Kesoram expanded into the production of rayon.

Its first rayon plant was built in 1959

The First Plant for manufacturing of rayon yarn was established at Tribeni, District
Hooghly, West Bengal

Kesoram soon entered the tyres and cement industries.

It is listed on four global stock exchanges National Stock Exchange of India, Bombay
Stock Exchange, Calcutta Stock Exchange Association, and the Societe de la Bourse de
Luxembourg.

Birla Tyres - Birla Tyres was first established in 1991, as part of Kesoram
Industries Limited. It got collaborated with tyre manufacturer Pirelli, in the
production and development of its tires

Birla Shakti Cement - Under the cement division of Kesoram Industries

Limited, Birla Shakti manufactures and sells cement. Birla Shakti has two cement
manufacturing plants.

Kesoram Rayon - It was established in 1959 with over 2,700 employees.

The factory currently has 52 spinning machines with an installed capacity of 6500 MT
per annum. It is the only company in Eastern India to manufacture Viscose Filament
Rayon Yarn and Cellophane paper.

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Akshay Bahety 340304 Assignment 2 BPSM Due Date 07-03-2017

The types of diversification used by the company are:

Heterogeneous (conglomerate) diversificatio n:

It is a growth strategy that involves expanding a company's business into an area, or areas, totally
unrelated to its core business. As we have seen Kesoram started with kesoram cotton mills then it
expanded to rayon, Cement and tyres. The advantage that they got from diversification was that
there was diversification of risk over different industries, thereby making the company less
dependent on one sector. It also opens the core company to new markets and new revenues