CORPORATE LEVEL

STRATEGIES- ADITYA
BIRLA GROUP

GROUP 8

SHEFALI AGARWAL – 36
SHIVALI CHOKSI – 37
SHUBHR KAMAL AGRWAL – 38
SIMRAN AJITSARIA - 39
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

INDEX

TOPICS PAGE NO.

─ An Overview- The Aditya Birla Group 1
─ About Corporate Level Strategy and its types 2-3
─ Vision and Mission Statement Analysis 4-5
─ The Acquisition 6-8
─ The Diversification 9-11
─ SWOT Analysis 12-13
─ Porters Five Forces Model 14-15

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

 A top fashion (branded apparel) and

lifestyle player
 The second-largest player in viscose
filament yarn
 The largest producer in the chlor-
alkali sector
 Among the top three mobile
telephony companies
 A leading player in life insurance and
asset management
 Among the top two supermarket
chains in the retail business

Also other business Aditya Birla Group is

The Aditya Birla Group into working towards the society and rural
areas through active participation into
healthcare, education, the girl child, women
The Aditya Birla Group is an Indian empowerment, etc. It also runs schools
Multinational Conglomerate founded by under its name providing education to 45000
Seth Shiv Narayan Birla in the year 1857. children out of which 18000 belong to the
The company has been named after Mr. underprivileged section and merit
Aditya Vikram Birla. It is a corporation scholarships are given to around 24000
worth 40 Billion USD in the league of children.
fortune 500. The Aditya Birla Group has a
workforce of around 120000 employees
from across 42 nationalities spread over 36
countries all over the world. It is ranked as
the fourth largest corporation all over the
world and first in Asia Pacific as the ‘Top
Companies of Leaders’. The Group has
various subsidiaries working under different
industries. For eg - Hindalco in the steel and
aluminum industry, Idea Cellular in the
Telecom Industry, ABFRL under the
garment industry, etc. And its presence is not
limited to one company per industry rather it
has more than one company in each
industry. In the Indian Scenario it is
renowned in the following fields-

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP
etc. On the basis of these, the expansion
strategies can be further given as follows-
 Cooperation- We would be talking
About Corporate Level Strategy
Corporate Level Strategy are the strategies
which are formulated directly by the Top
Level Management with a view to formulate
strategies for the entire corporate as a whole.
Their main aim is to provide plan of actions
to its different business units so that they
know where the company is headed towards
and work accordingly. It also helps in proper
allocation of utilization of the resources
available by the different business units.
After deciding on these strategies they are
analyzed as per the standards of the
company and implemented by the
corporates. The Corporate level strategies
can be further bifurcated as follows-
 Diversification- Diversification talks
Expansion
As the name suggests, these strategies are
directed towards the growth of a company
wherein the company uses aggressive
marketing strategies and huge investments
with a view to take itself to the next level.
Under this also there are various ways in
which a company can choose to expand its
operations such as – mergers and
acquisition, joint venture, expanding
overseas, develop a new market or product,
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
about this strategy further in our
project as mentioned above.
Cooperation consists of three main
things- Mergers and Acquisitions,
Joint Ventures and Strategic
Alliance wherein Mergers and
Acquisitions is acquiring another
company in a friendly or an
aggressive manner to hold its share
and developing it further towards
growth and sustainability which was
not possible given the present
scenario of the company. The
acquirer acquires a company when
he sees growth prospects with little
investment whereas an acquire gives
away their company because they are
not able to generate the expected
revenue or bring in investment for
further penetration. For eg- The
acquisition of Telenor by Bharti
Airtel in order to increase its market
reach because of the emerging
telecom leader- Reliance Jio.
about entering into new markets
where the company currently has no
players or introducing new products
under different categories in new
market or the same market to
differentiate from what it had been
doing already. For eg- A company
presently working in the steel sector
plans to expand by investment into
the personal care sector and
manufacturing products for the same
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

will account for diversification by  Divestment and Disinvestment

the company.
 Internationalization
 Digitalization
 Integration
 Concentration
Stability
Stability strategies are the strategies adopted
by a company in order balance and remain
where it is at present and concentrate more
on the functions being handled by it
presently rather than entering into new
markets and expanding itself further. It is
basically an opposite of the Expansion
Strategy. The Stability Strategy can be given
as follows-
 No Change Strategy
 Profit Strategy
 Pause/Proceed Strategy
 Liquidation
Combination
Combination Strategy is basically the
combination of all the three strategies
discussed above undertaken by the company
either one at a time or collectively across
different businesses at the same time or
same business at different times. The
combination strategies can be given as
follows-
 Sequential
 Simultaneous
Out of all these strategies discussed above
we have taken the two described in details
i.e. Cooperation (Mergers and Acquisition)
and Diversification. These will be further
discussed in details taking live insights with
relation to The Aditya Birla Group.

Retrenchment
Retrenchment Strategy are strategies
undertaken by the company for basically
controlling the damage that has been done to
the company because of the trends in the
market. The company either comes up with
certain policies or plans that are to be
followed or sells the business or a part of it
to some other company or even completely
liquidate it if nothing else works out and this
looks out to be the best alternative available
in the given situation. The retrenchment
strategies can be given as follows-
 Turnaround
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

worldwide post which there was no stop to

its joint ventures all over the world with
over 36 countries including Malaysia,
Philippines, USA, Canada, etc. Making it a
Global Conglomerate as of today.
Aditya Birla Group has been very well able
to achieve its vision statement as cited in the
examples above and also it focuses on all of
its business clearly and completely which
can be justified in a way that today most of
the renowned companies all over the world
comes under Aditya Birla Group be it-
Hindalco, Birla Sun Life, Grasim, Idea
Cellular, Pantaloons, etc. This has not been
done at once by the company, rather it went
through a step by step approach by focusing
on one industry at a time and expanding
further when one milestone was met as a
Vision and Mission Statement
result of which it is known as one of the
Analysis multi-national giants in and around the
world.

The Vision
“To be a premium global conglomerate,
with a clear focus on each of the
businesses.”
How well has it been achieved?
The company incorporated in 1857 had
started its operations as a cotton
manufacturer in Pilani, Rajasthan after
which it went into Jute Mills as a result of
which Grasim was set up in the year 1947
through massive expansion strategies. Then
the company went into the aluminum sector
by setting up Hindalco in the year 1958.
Likewise over the years that the company
has covered in its journey, it went from its
presence as a cotton manufacturer to
aluminum, Rayon, chemicals and fertilizers. The Mission
Also it set up the largest palm oil refinery in
Malaysia in the year 1977 taking its reach
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

“To deliver superior values to our customers,

shareholders, employees and society at
large.”
How well has it been achieved?
The Aditya Birla Group in all true sense has
abided by its mission statement as well by
making the people associated with them as
happy as one could be. When it comes to the
customers Aditya Birla produces according
to the needs and wants of the consumers in
the market which is why- when there was a
need for Textile they bought it in, when
there was a need for fashionable garments
they bring out Forever 21 or merge with
Pantaloons. Also the price quoted by them
are not very high and are affordable by any
lower to middle class group of people.
Coming to the stake holders. They have
proven over time that an investor can have
faith in them and earn higher returns because
of the amount of returns that the company
earns and also Aditya Birla Nuvo (one of its
subsidiaries) had announced a dividend in
March,2016 of 50% worth Rs. 5 per share
indicating that the company not only has
good stakeholders but is also working
towards making them stay in the company.
The company has a workforce of 120000
employees increasing day by day with the
increase in its subsidiaries and also as
mentioned above the company’s main focus
is not limited to business rather it has its
reach in healthcare, the girl child and rural
development through various organizations
and not only this it also provides education
to those who don’t have access to it and
work for the development of the backward
areas so that the world could be a better
place to live in.

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP
Acquisition
The basic business of the Aditya Birla
Group has been textiles since the evolution
of the group. Over all these years they have
been trying to evolve and develop their
business. the main manufacturing the retail
garment manufacturers are Jayshree Textiles
and Madura Fashion. Jayshree textiles in the
largest and the best linen producer and
exporter of the country. Whereas, Madura
Fashion and Lifestyle is into the production
of
In the year 2012, the group bought the retail
format business of Pantaloons which was
owned by Future Group. It was because of
the good relations between the owners of the
groups that Future Group being the major
rival of Aditya Birla Group sold their
business to them.
Madura Garments and Lifestyle
Established in 1988 by Madura Coats
Limited, Madura Fashion & Lifestyle has its
origins in the erstwhile Coats Viyella Plc,
Europe’s largest clothing supplier. In
December 1999, Aditya Birla Nuvo, an
Aditya Birla Group company, acquired
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
Madura Fashion & Lifestyle to become the
undisputed leader in the readymade
menswear industry in India. In 2000, the
company became a wholly-owned
subsidiary of Aditya Birla Nuvo.
Madura Fashion & Lifestyle, a division of
Aditya Birla Nuvo Ltd, is one of India’s
fastest growing branded apparel companies
and a premium lifestyle player in the retail
sector. After consolidating its market
leadership with its own brands, it introduced
premier international labels, enabling Indian
consumers to buy the most prestigious
global fashionwear and accessories within
the country.
The company’s brand portfolio includes
product lines that range from affordable and
mass-market to luxurious, high-end style
and cater to every age group, from children
and youth to men and women. Madura
Fashion & Lifestyle is defined by its brands
— Louis Philippe, Van Heusen, Allen Solly,
Peter England and People — that personify
style, attitude, luxury and comfort.
Madura Fashion & Lifestyle reaches its
discerning customers through an exclusive
network comprising 1,980 stores (as on
September 2015), covering 2.5 million sq ft
of retail space, and is present in more than
3,800 premium multi-brand stores and 490+
departmental stores.
The company's lifestyle store, The
Collective, offers a unique blend of global
fashions, international trends and innovative
customer services, to customers in
Bangalore, Mumbai, Delhi, Delhi NCR,
Chandigarh, Pune and Chennai.
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

Pantaloons Retail India Limited economy of scale. The two retail

Pantaloons Fashion & Retail Limited is an
Indian premium clothing retail chain. The
first Pantaloons store was launched in
Gariahat, Kolkata in 1997. As of November
2013, there were 76 Pantaloons stores in 44
cities of the country. The future group was
loaded with debts in their balance sheets.
This made them decide to sell the fashion
retail business to the Adtiya Birla Group.
They are still involved in manufacturing
garments and sell through their retail spaces
of Big Bazaar.
Rationale
Both the groups are hold major part in the
garment retail sector. Aditya Birla Group is a
conglomerate and the Future Group has
wide space in the retail markets. The Future
Group had debts of 5800 crores of debts
which they wanted to pay out for which they
decided to sell of their business format of
Pantaloons. Aditya Birla Group has retail
existence but it is limited to individual stores
of its brands. Owning Pantaloons would
give them an opportunity to attract more
consumers of the market.
The major benefits of the deal and the
synergies that both the companies gained on
are listed below:
 It leads to the creation of what the
group calls “India’s largest pure-play
branded apparel company” with a
much healthier balance sheet, a
diverse product portfolio, and
operational synergies.
 Combining forces will also help
Pantaloons explore synergies through
arms, combined, have a retail
footprint of 4.8 million sq ft, spread
across 1,869 stores and around 6,000
additional points of sale.
 ABFRL has a consolidated turnover
(that is, Pantaloons’s turnover plus
Madura’s turnover) of Rs 4,759 crore
in fiscal year 2014.The EBITDA,
stood at Rs 401crores. Pantaloons
alone had a turnover of Rs 1,661
crore and the EBITDA was at Rs. 39
crores
 One of the biggest challenges
Pantaloons faces, which was also a
major factor in Biyani deciding to
sell the company, is the high level of
debt. Strengthened with the financial
muscle (especially higher
profitability) that Madura brings to
the table, Pantaloons will have a
much better debt profile.
 As on September 30, Pantaloons had
an outstanding debt of Rs 1,085
crore. This meant that the company’s
debt to Ebitda ratio stood at an
alarming 27.8: 1. But when Madura’s
earnings are taken into account,
Pantaloons’s debt to equity ratio
dramatically improves to around
3.88:1. This is after taking into
account a net debt of Rs 473 crore
that was transferred to Pantaloons
along with Madura’s businesses.

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

market directly as the Pantaloons Stores

were selling goods of other brands too. This
gave them an advantage over the
competition again as they were able to
understand the market’s needs directly. They
could now act to bring and innovate
products of their own brands before the
competition came to know about the
markets. Thus, the holistic marketing of the
Analysis company became more efficient.
The expansion strategy deployed was not
only a business deal made by the group to
increase its retail footprint in the market but
it was also about the values that the group
has towards its peers in the market. They
helped out Future Group so that they could
pay-off their debts. Similar traits of the
company were observed when the company
went to acquire Jaypee Cements in 2015.
The acquisition done by the company has
made the existing entity the largest in the
garment retail industry in terms of area. The
acquisition has been very beneficial to the
company as they have been able to increase
their profit margins also. The retail arm of
the company has grown inorganically and
also proven to be a tough competition to the
existing players like Lifestyle and Shoppers
Stop. The acquisition has been able to revive
the business of pantaloons which was
making losses before the acquisition but
now is able to turn profits for the group.
Acquiring the showrooms of Pantaloons
helped the company to make its products
more available to its customers. Now they
were not totally dependent on their
individual retail stores and the other multi
brand outlets like lifestyle and shoppers
stop. They had their own retail multi brand
outlet selling their product where they could
also know about the competition in the

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP
Diversification
In 1995, Kumar Manglam Birla was made
the Chairman of the Birla Group. He started
with a restructuring and streamlining of the
whole group.
Then the Indian Market was very attractive
for cell phone industry; Kumar Manglam
Birla formed a joint venture with AT&T
group to form Birla Communications.
Telecom services were recognized as an
important tool for the for the socio-
economic development of a country.
Telecom being the main supporting service
for rapid growth and modernization of all
the sectors of an economy, its growth in a
developing economy like India was obvious.
Hence, Birla group made the right move of
applying diversification strategy of growth
and entered a very attractive market.
Idea Cellular
The history of the company goes back into
the year 1995, when Kumar Manglam Birla
was made the new face of the conglomerate
after the death of Aditya Birla. It was
incorporated as Birla Communications
Limited. They obtained the licenses for
providing GSM-based services in the
Gujarat and Maharashtra circles following
the original GSM license bidding process.
Then they changed their name to Birla
AT&T Communications Limited following
joint venture between Grasim Industries and
AT&T corporation. The company then in
2000 merged with TATA cellular Limited.
The Merged entity of TATA, Birla and
AT&T Limited went on to acquire RPG
cellular Limited and consequently the
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
license for the Madhya Pradesh Circle,
Andhra Pradesh Circle and the Delhi Circle.
It was in the year 2002 when the company
changed its name to Idea Cellular Limited
and launched “!dea” brand name. it was in
the year 2006 when the TATA sold their
holding in the business to Aditya Birla
Group and creating their own
telecommunication arm by the name TATA
Telecommunication Services. The year was
big for the company as they also hit the 20
million subscriber mark.
In India there is cut throat competition in the
telecommunication sector. There are big
players like Bharti Airtel, Vodafone and the
Government of India owned BSNL. Even
with the evident presence of these
companies Idea has been able to sustain a
market share of 11.9% (subscriber base).
There has been a consistent growth in the
profits of the company of 25.23% over the
last 5 years.
In the telecommunication sector the revenue
driver is the number of subscribers a
company caters to. However, with the
advent of JIO Communications in the Indian
Telecom Sector not only have the revenues
been hit but also JIO as a competitor has
been ruthless. The revenues of the company
in the third quarter of the year fell by 7.08%
quarter on quarter. The company reported
losses of 42 crores and 492 crores in quarter
two and three respectively as compared to
profits of 456.18 crores in the first quarter.
Amongst, such inconsistencies in the market
the company has confirmed the news of
considering a merger with Vodafone India.
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP
Rationale
The Aditya Birla Group is a conglomerate
and they are into various businesses like
Non-ferrous metals, Cement, carbon black,
textile business, telecom services and
financial services. In the year 1995 when the
group got into the joint venture with AT&T
to enter the telecommunication business in
India the economy of the country was in its
developing mode as the policies for doing
business had seen drastic changes in 1991
only. The conglomerate back then was
already into the textiles business and the
metals business.
The country was in the development mode
with great need of Telecommunication
services by different companies. The
government had opened the sector for
private investment in 1991. Major changes
were seen in the year 1994 when the
Narsimha Rao led government introduced
the National Telecommunications policy.
This brought changes in the following areas:
Ownership, service and regulation of
telecommunications infrastructure. The
policy introduced the concept for
telecommunication for all and its vision
was to expand the telecommunication
facilities to all the villages in India.
Liberalization in the basic telecom sector
was also envisaged in this policy. They were
also successful in establishing joint ventures
between state owned telecom companies and
international players. Foreign firms were
eligible to 49% of the total stake. The multi-
nationals were just involved in technology
transfer, and not policy making.
The scenario in the telecommunication
industry of the country had changed with the
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
introduction of this policy of the
government. Viewing this opportunity in the
country the Aditya Birla Group they entered
into a joint venture with the international
company AT&T and discovered the
telecommunication industry. The partner in
the venture was offering the technical
assistance in the sector and the local
company was offering the local guidance
and resources needed for the venture. The
venture also included the TATA Group.
Somehow, by 2006 the other two exited the
venture by selling their respective stakes to
Aditya Birla Group.
Aditya Birla Group at that time was prompt
enough to take advantage of the opportunity
by government and enter the
telecommunication sector and diversify its
business to reduce the risks in the existing
textile and metal industry.
Analysis
The Aditya Birla group was infused with
new energy as Kumar Manglam who was 28
years of age became the CEO of the group.
The group since then has kept on growing.
The group has been highly active in all of its
businesses.
Few things that were noteworthy about the
diversification strategies deployed by the
group were that:
 The group’s choice of the new
sector in which they venture into
depends on their opportunities.
Whenever they foresee an
opportunity in a sector they try to
make most of it by investing in
the sector. When the group
analyzed the state of the telecom
sector, not only on the basis of
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

the customers but also the

structural change that was made
by the government. Even while
entering the insurance sector they
observed the low entry barriers
that the sector had and the low
cost of entering the sector.
 The group has been involved into
joint ventures with foreign
companies existing in the sector
so to get their operational
assistance and expertise as they
promise to provide the market
knowledge to the foreign
counter-part. The conglomerate
chose to get into a joint venture
with AT&T which was an
American telecommunication
multinational as they introduced
Birla Telecommunications to the
Indian markets. Later AT&T sold
their stake to Birla and TATA in
2006 to walk out of the venture
and then eventually Aditya Birla
Group became the sole owner of
the telecommunication arm Idea
which is currently the 3rd largest
telecommunication company in
the country. Similarly, they got
into a joint venture with the Sun
life Insurance a Canada based
company to enter into the
insurance industry of India. The
group has been into providing the
financial assistance to these
foreign companies with in depth
knowledge of the Indian market
as they had been there as a
Textile firm for a long time.

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP
SWOT Analysis
STRENGTHS
• Strong Brand recognition, excellent
marketing support and customer
acceptance.
• Dynamic and round leadership
supported by high qualified,
cultivated, committed and charged
team of officers and staff with full of
professional approach and industrials
work force.
• Internet sales- The Aditya Birla
Group launched a new online fashion
store, joining the growing trend of e-
commerce. The site www.abof.com
offers brands from both the Aditya
Birla Group and other companies.
• Growing international presence-
Over 50 per cent of its revenues flow
from its overseas operations
spanning 36 countries.
• Product innovation capabilities- The
corporate research and development
centre for the Aditya Birla Group, the
Aditya Birla Science and Technology
Company Private Limited
(ABSTCPL) supports the broad
diversity of the Group's businesses
through multi-disciplinary teams of
expert scientists and engineers who
lead fundamental and applied
research projects.
• Technological excellence- With
energy conservation becoming a
strategic business imperative, the
Corporate Technical and Energy
Services has evolved as a preferred
in-house technical and energy
conservation solution provider for
the Aditya Birla Group of
companies.
• Effective Leadership- in the 20
years that Mr. Kumar Mangalam
Birla - Chairman of ABG has been at
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
the helm of the group, he has
accelerated growth, built a
meritocracy and enhanced
stakeholder value. in the process, he
has raised the group’s turnover from
us $2 billion in 1995, to us $41
billion today.
WEAKNESS
• Complexity of operation- Due to
multiple businesses in various
industry, the management process is
inherently more complex. With the
complexities and dynamics of the
world changing rapidly, it presents a
major challenge to the management
of organizations. While addressing
concerns such as allocating limited
resources, comparing performance
with competitors and responding to
customer needs, understanding
conflicting priorities, etc. the
management has a daunting task.
• Stimulating and retaining young
talent is a challenging task due to
tremendous opportunities in metros.
• Difficulty to obtain skilled labor
which in turn increases cost of
training for imparting skills to
workers.
• Lengthy processing chain
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

OPPORTUNITIES

• Evolving retail industry in India’s

urban and semi urban market, it is
expected to grow.
• Growing e-commerce’s business.
• Growing awareness and brand
consciousness across different socio-
economic classes.
• Growth of core sector industries
• Increase in infrastructure projects
Technological Changes
• Increase in govt spending
• The Group has big market in western
India
Gujarat government has opened of
blocks of lime stone for lease in
Kutch district; Aditya Birla group
have an opportunity to install a 2
million tonne cement plant in this
area

THREATS

• Strong competition from domestic

players also from global players
entering into Indian retail market
• Increasing commodities prices
causing pressure on profit margins
• Excess over capacity can hurt
margins as well as prices.
• The impact of foreign currency
fluctuations and interest rates

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

Porter’s Five Force Model laws levied on them by the

government. As for the steel or the
oil sector there are a lot of entry
Threat of
new barriers in the form of benchmarks
Entrants and infrastructure that a company has
to set up in order to enter such
industries. So overall the Threat of
Bargaini New Entrants for Aditya Birla varies
ng Rivalry Bargaini from Low to Medium.
Power Among ng
of Competit Power of II. Bargaining Power of Suppliers
Supplier ors Buyers
High
s
We all know that Aditya Birla is a
global conglomerate because of
Threat of which there is a high bargaining
Substitue power to the suppliers as most of the
s companies are in the foreign market
wherein Aditya Birla has a joint
venture. For it to switch from one
supplier to the other will require a
Porter’s five forces model basically talks huge switching cost because of
about the various forces that drive a which the company has to stick to
particular company, five being the most one supplier and go according to
important out of them on the basis of which what they say with a little
a company decides upon its various discrepancy from their own side.
strategies. This model talks about five main
factors for a company which are- the buyers, III. Bargaining Power of Buyers
the suppliers, the competitors, the entry Medium to High
barriers levied by the government and the Buyers tend to have a higher
availability of similar products in the bargaining power over a company
market. The five force model for Aditya when there are substitutes available
Birla Group can be given as follows- in the market. When we talk about
I. Threat of New Entrants the retail sector, there is a high
bargaining power to the buyers
Low to Medium because there are various other
The threat for new entrants for substitutes in the form of online
Aditya Birla Group varies depending marketing and malls with variety of
on the different industry it operates products where buyers can go and
in. For the retail sector the threats are buy products if they are not satisfied
medium because there is emerging by those offered by the company. For
era of new suppliers in the market the steel and oil sector there are
and there is not much that it takes for comparatively lesser substitutes
them to enter because of the flexible
CORPORATE LEVEL STRATEGIES- ADITYA BIRLA
GROUP
A BRIEF STUDY ON CORPORATE LEVEL STRATEGIES OF ADITYA BIRLA GROUP

because of which the bargaining Low to Medium depending on its

power varies from low to medium. various subsidiaries.
Overall, the corporation has a
medium to high bargaining power of
buyers.
IV. Threat of Substitutes
Medium to High
There are a lot of substitutes
available in the retailer sector in the
form of Flipkart, Big Bazaar, etc.
because of which there is a high
threat of substitutes to the retail
companies under the Aditya Birla
group. Whereas, when we talk about
the other industries such as steel and
oil, there are very low substitutes
because of the entry barriers levied
on companies to enter such industry.
As a result of which there are very
limited companies dealing in the
same. Overall, we can say that the
company has a Medium to High
threat of substitutes.
V. Rivalry among Competitors
Low to Medium
As already mentioned in the above
points we can see that the company
has to undertake various aggressive
marketing strategies for the retail
sector in order to compete with the
retailers and keep bringing out
differentiation in their products for
the same. On the other hand when it
comes to the other sectors there is
much less of competition among the
various sellers because of the fixed
buyers and loyalty shown to them by
consumers. So overall we can say
that the Rivalry among Consumers
for Aditya Birla Group varies from

CORPORATE LEVEL STRATEGIES- ADITYA BIRLA

GROUP