Havells

Q1. Do you believe the Lloyds acquisition was a good business

decision by Havell’s? Evaluate the Pros and Cons

Yes we think the Lloyds acquisition was a good business move for
Havells. It has now transformed itself into a consumer durables brand and
is currently eyeing a 3000-cr turnover from the white goods category.
Following is the SWOT analysis of Havells:

Strengths
1. Strong global distribution network
2. Great investments in fast-growing emerging countries
3. Very good acquisition history
4. Amongst top three players in most its products with aggressive
building
5. Broad range of products and good advertising through TVCs
6. Global presence with many diverse product lines in 50 different
countries
7.First FMEG Company to offer doorstep service
8. High investment in R&D has helped it to deliver innovative solutions
to its customers

Weaknesses
1. Globally small market share
2.Slowdown of real estate
3.Slowdown in global markets will effect more adversely after a series of
acquisitions

Opportunities
1. Globally emerging markets
2. Weak cycles of the sector
3.Acquisition of Chinese firms for low cost manufacturing
4.Vertical integration into Havells retail outlets
5. Leveraging upon motor business in India Unorganized

Threats
1.Unorganized markets
2.Delays in execution of power projects
4. Environmental legislations on industrial wastes
5.Intense competition in the sector
Q2. Havells is working on a dual dealer channel strategy for it’s
business. Do you think it is a wise move? What can be the pitfalls of
this move and how can Havells manage it ?

Yes, we think that it was a wise move by Havells because In today’s truly
global economy, many products reach the maturity stage in their product
lifecycle very quickly. This means that sales often reach the point at
which growth stops and sales begin to decline. Quite often, this shortened
product lifecycle is a consequence of intense competition.

In response to this, many businesses have been able to successfully

extend their product’s lifecycle, by increasing sales volume. So Havells
can increase the sales volume by using Lloyd’s distribution network.
Llyod has 10,000 strong dealer network, 38 sales branches, over 600
service centres and presence across 1,700 towns and cities.

Pitfalls

1. Intra Brand competition: same product category competition.

2. Building trust among Lloyd specific dealers.

Solutions

1. Providing attractive schemes to the dealers for maintaining dual

product category.
2. Marketing about the brand- Llyod might have been acquired but
there would be a compromise on quality