PANASONIC INDIA

Home appliances

Introduction to home appliances

Key Industry Dynamics
Industry Size: Rs. 350bn Key Categories: White Goods, Brown goods and

Consumer electronics. Competitive landscape: Dominated by Korean majors like LG and Samsung in most of the segments Margin Profile: Low margin, dependant on volumes Growth opportunities: Lower penetration coupled with increasing disposable income

The Indian home appliances segment can be segmented into three groups:

Market Growth

COMPANY SWOT
Strengths :Best energy saving products Constant focus on R&D (R & D is being localized) Innovation High Loyalty

Opportunity:Growing Indian household appliances market. With Advancement in Technology they have a high chance to make new products. Product and services expansion. Export.

Threat:Weakness:Low Market Share. Bad Distribution channel. Late Entrant. Competition Economic Slowdown Price wars Substitutes

INDUSTRY SWOT
Strengths :Need based product Rising Disposable income coupled with increasing consumer exposure Credit/financing Schemes which make purchase easy

Opportunity:Exploring rural market Technology advancement High level of suppliers of raw materials Localized set up of Manufacturing Plants

Weakness:Seasonal Demand Unable to reach 100 % Target Market Falling prices of consumer electronics Trained manpower shortages in India

Threat:Counterfeit products are present Cheap imports from Singapore, china and other Asian countries Economic Slowdown The biggest threat is supply related issue and demand issues

Panasonic India
Headquartered in Osaka, Japan, Panasonic

Corporation is a leading global manufacturer of electronic products and solutions for consumer, Panasonic commenced its operations in India in the year 1972 and has shown a 200 percent growth in the past three years; and visions to become Indias largest electronics and durables brand by 2018.

About panasonic
Workforce of 12,650 people across India currently Market outreach: Over 134 exclusive Brand Shops pan-India, 27 P4

(Panasonic Premium Partner Program) outlets spread across the country and total 1184 unique service centres to provide one-stop solutions. Panasonic currently has 28 branch offices Turnover: Panasonic India registered sales of Rs 5,500 crore (USD 1042 million) in FY 2011 and an estimated turnover of Rs 10,000 crores (USD 1940 million) in FY 2012. The company has recently invested USD 300 million in the country to set up an R&D and manufacturing facility and on various marketing initiatives. Panasonic largest manufacturing Unit at Jhajjar is under construction and is envisaged to be completed by Nov 2012. The new unit will manufacture air-conditioners, washing machines, welding and cutting machines after December 2012, with an investment of about US $200 million over a period of five years and the mass production will start in January 2013.

Sister companies
Panasonic Appliances (PAPIN): Established in 1988 for

manufacture, import, marketing and sales of kitchen appliances and small domestic appliances. PAPIN is headquartered in Chennai, Tamil Nadu. Panasonic AVC India [PAVCI]: Established in 1996, for manufacturer of CRT TVs and LCDs. PAVCI is based in Noida, UP Panasonic Energy India Co Ltd [PECIN]: Established in 1972, for manufacture and sales of dry cell batteries. PEIN is based in Baroda, Gujarat. Panasonic Carbon India [PCIN]: Established in 1982, for manufacture and sales of carbon rods. PCIN is based in Chennai, Tamil Nadu Anchor Electricals: Wholly owned subsidiary of Panasonic electric works manufacturing over 3000 products under 20 major product groups including Switches and Wiring devices, Wires and Cables, Circuit breakers & Protection devices, Fans, Lights & Luminaries established in 2007.

INTRODUCTION TO PEST ANALYSIS

Political Factors: Government Intervention, Tax Policy, Trade

Restrictions, Tariffs
Economic Factors: Economic Growth, Interest Rates, Exchange

Rates, Inflation Rate

Social Factors: Cultural Aspects, Health Consciousness, Age

Distribution, Emphasis on Safety

Technological Factors: R&D, Automation, Technological

Change, Innovation

PEST ANALYSIS
. Political Factors
Labour unions effects a lot the production Resolution to reduce emission of carbon footprints in the

atmosphere
Anti-dumping duty on imported Machinery

Economical Factors
Growth of retail sector expected to reach 16% by 2011-12

from 4% in 2007
High investments are needed in the consumer durables Emergence of organized retail market with large players like

Croma, Next, Reliance Digital - leading to lower prices and higher varieties

Social Factors:
Changing perception of luxury to necessity In rural areas there is poor infrastructural facilities like

availability of electricity
Demand of the consumer durables is seasonal and cyclic Highly growing consumer durable market

Technological Factors:
Improved electricity consumption Higher quality products Technology is changing at a very fast rate

Porters five Forces

THREAT OF NEW ENTRANTS

It is considered to be moderate as

Selective & exclusive distribution.

Economies of scale enhance the entry barrier. Huge capital requirement for setting up manufacturing

unit, importing the components. Good amount of money required for positioning and capturing the customers mind share. Central & state level regulations & policies.

THE BARGAINING POWER OF BUYERS

It is high. As customers have become

Brand conscious and Brand loyal that make them buy a

particular brand only. Knowledgeable & wise with the help of internet/media/word of mouth communication. Tech savvy as they look for the latest technological trends. Price sensitive

THE BARGAINING POWER OF SUPPLIERS

It is low due to indigenous supply base & most raw

materials are imported. Backward integration possible and depicted by a few players.

COMPETITIVE RIVALRY
Number of well-established players; several new players

entering Chinese manufacturers Good technological capability Many untapped potential markets and players

THREAT OF SUBSTITUTES
Unbranded products and cheaper imports could enter

the market. Overall, the sector is a dynamic one, with significant growth opportunities and rapid technological changes

Long-term Objectives & strategy

Strickland selection matrix Overcome Weakness

Internal route Product Development Horizontal Integration

External route

Build on strength

Ratios
Margin Analysis
Gross Margin - 31.36% EBITDA Margin - -5.77%

Growth Over Prior Year

Total Revenue - -4.31% EBITDA - -313.64% Gross Profit - -13.30%

Thank You.