ASSIGNMENT –I

Candidates Name: BHUPENDRA SONI

BITS Id No: 2018HB79052
Subject: Strategic Management and Business Policy
Course Code: MBAZG611
Lecturer: Prof: Neetu Yadav
Submitted on date: 28.04.2018
Topic: Company Analysis based on

1) Corporate Strategy
2) BCG matrix
3) Porters five forces
4) SWOT

Of Company: Udaipur Cement Works Ltd

 1. Corporate Strategy-

UDAIPUR CEMENT WORKS LIMITED (UCWL)

Udaipur Cement Works Limited (UCWL), is one of the leading cement manufacturing Company that has
its roots originated in city of lakes, state of Rajasthan, in western India. Our philosophy is based on
sustainable growth and developmental framework that works for a better and happier
tomorrow/future.

Udaipur Cement Works Limited, (formerly known as JK Udaipur Udyog Ltd) was incorporated as a Public
Limited Company on 15th March 1993 having registered office at Jaipur, Rajasthan. The name of the
Company was subsequently changed to its present name Udaipur Cement Works Limited from 19th May
2006. The company presently is a subsidiary of renowned Indian Cement Manufacturing Company, JK
Lakshmi Cement Limited, which is part of reputed business conglomerate JK Organisation (JKO) that has
rich business legacy of more than 135 years. The company is listed on Bombay Stock Exchange (BSE).

The company has an integrated Cement Manufacturing unit with installed cement production capacity
of 1.6 Million tonnes per annum (MTPA). Since its inception, the company is committed towards
boosting sustainability through adopting latest art of technology designs, resource efficient equipment
and various in-house innovations. The company has a 6 MW Waste Heat Recovery System that utilizes
the waste heat of kiln and helps reducing the carbon footprint of the company by 34058 tCO2e per year
and thereby saving 24724 tons of coal and 113529 KL of water compared to conventional thermal power
plant . The company has also installed a 6 km long Over Land Belt Conveyor (OLBC) to source raw
material from its captive mine to the manufacturing plant that further adds value in gaining cost and
environmental efficiency.

With the blend of modern technology and rich legacy, UCWL manufactures world class cement under
the brand name-Platinum Heavy Duty Cement. The cement is made using latest superior PSD
Technology which provides a wide array of benefits to the consumers like 10% more volume, high initial
strength, superior workability and fast setting.

This incredible communion is the source of inspiration for JK Organisation, which also embodies a
perfect blend of rich legacy of over 135 years and modern work culture. JK Organisation a very well
respected name in the Indian industry contributing in the various sectors important to the national
growth. Its major interests are in the field of production of Tyres, Paper, Cement, Automotive
transmission system, Agri-Genetics, Dairy Products, Education etc. The group has been committed to
“Make in India’ even in the pre-independence era by manufacturing products of impeccable quality to
substitute imported goods. It has been in cement business for over three decades and distinguishes
itself based on its innovative practices and initiatives aimed at customer satisfaction.

All products of the JK Organisation have a strong brand recall and enjoy a significant market share in
their respective segments. The strong brand equity of the JK Organisation has been built through use of
latest technologies, continuous research & development, innovation and professional management. JK
Organisation has set up highly reputed Research and Development Institutes in various fields.
Major Highlights-

Udaipur Cement Works Ltd Came into existence in 1993.

Formerly Known as JK Udaipur Udyog Limited.
Name Changed to UCWL in 2006.
A subsidiary, JK Lakshmi Cement Limited, which is part of JK Organization (JKO) that has rich business
legacy of more than 135 years.
It is an integrated Cement Manufacturing Plant with Captive Limestone Mines
Installed Cement Manufacturing Capacity : 1.6 Million tonnes per annum
Total Plant Area: 64.8 Ha
Total Mines Area: 916 Ha

VISION: To grow and foster into one of the leading customer centric cement companies and a promise
to deliver products with latest technology.

MISSION:
• Customer Gratification to be one of the predominant objectives.
• Obtain to achieve operational excellence.
• Inclined towards a responsible corporate social attitude towards society
• A talented pool of employees to achieve success in all domains.

OBJECTIVES:

 Double Sales and Profit (PBIDT) in 4 years

 Achieve Operational Excellence
 Create superior value for customer through Premium Products & Brand Positioning
 Be a workplace of choice-Attract, Retain and grow Talent Pool of change leaders
 Continuously enhance shareholders’ wealth and be a preferred portfolio among investors
 Socially Responsible Corporate Citizen

UCWL manufactures world class cement

using latest superior PSD Technology.
 2. PRODUCT PORTFOLIO MATRIX

Cash Cows
These items are responsible for the prime revenue generation of the company because of the high
market share and low market growth rate. High market share reflects to high volume of sales, and
low market growth means low consumption of cash for the milking purpose. The products must be
maintained to lead the market. Jk Lakshmi Pro Plus is the cash cow for the company, as it serves highest
in this category to the consumers.

Stars
These are the products which have high market share, which means they have high volume of sales,
but high market growth which also reflects to the high consumption of cash for the investment
purpose. The company must focus on the implementation of the effective strategies for turning the
star into cash cow. Platinum Heavy Duty Cememt is the star product for the UCWL, as it explore and
produce 60% of it,which covers overall 20% of the consumer demand. it needs to work hard to maintain
the leading position and increase the percentage for serving the consumers.

Question Marks
The items have the high market growth and has the potential to grow more in future in terms of
market share, as these items have low market share. The market share needs to be increase by the
help of heavy investment and some effective strategies, or else this will be the dog item for the
company. JK cement ACC Blocks is the question mark item for the UCWL, because of multiple
competitors in the market. The quality of the service and products needs to be improved. It is necessary
for the company to invest in this to make it profitable and reduce the burden.
Dogs
These items have the low market growth rate and low market share, which means they consume
much more than any other, and become the burden on the company. They have to shut down if the
conditions worsen and the investment can be used somewhere else. JK Lakshmi Gypsum Gold is the dog
item for the JKLC , as it consumes much cash of the company, but generate very less. The company
needs to focus to this area, to make it star item, or else the consumption of cash will make it
negative for the company.
 3. Porter’s Five Forces Analysis

This section analyses UCWL using each of the five forces of Porter’s model.

(A) Threat of New Entrants

•The economies of scale is fairly difficult to achieve in the industry in which UCWL
Operates. This makes it easier for those producing large capacitates to have a cost advantage.
It also makes production costlier for new entrants. This makes the threats of new entrants a
weaker force.
•The product differentiation is strong within the Cement industry, where firms in the industry sell
Differentiated products rather a standardised product. Customers also look for differentiated
products. There is a strong emphasis on advertising and customer services as well. All of
these factors make the threat of new entrants a weak force within this industry.
•The capital requirements within the industry are high, therefore, making it difficult for new
entrants to set up businesses as high expenditures need to be incurred. Capital expenditure is
also high because of high Research and Development costs. All of these factors make the
threat of new entrants a weaker force within this industry.
•The access to distribution networks is easy for new entrants, which can easily set up their
distribution channels and come into the business. With only a few retail outlets selling the
product type, it is easy for any new entrant to get its product on the shelves. All of these
factors make the threat of new entrants a strong force within this industry.
•The government policies within the industry require strict licensing and legal requirements
to be fulfilled before a company can start selling. This makes it difficult for new entrants to
join the industry, therefore, making the threat of new entrants a weak force.

How UCWL can tackle the Threat of New Entrants?

•UCWL can take advantage of the economies of scale it has within the industry, fighting off
new entrants through its cost advantage.
• UCWL can focus on innovation to differentiate its products from that of new entrants. It can
spend on marketing to build strong brand identification. This will help it retain its customers
rather than losing them to new entrants.

(B) Bargaining Power of Suppliers

•The number of suppliers in the industry in which UCWL operates is a lot compared to the
buyers. This means that the suppliers have less control over prices and this makes the
bargaining power of suppliers a weak force.

•The product that these suppliers provide are fairly standardised, less differentiated and have
low switching costs. This makes it easier for buyers like UCWL to switch suppliers. This
makes the bargaining power of suppliers a weaker force.

•The suppliers do not contend with other products within this industry. This means that there
are no other substitutes for the product other than the ones that the suppliers provide. This
makes the bargaining power of suppliers a stronger force within the industry.

•The suppliers do not provide a credible threat for forward integration into the industry in
which UCWL operates. This makes the bargaining power of suppliers a weaker force within
the industry.
•The industry in which UCWL operates is an important customer for its suppliers. This
means that the industry’s profits are closely tied to that of the suppliers. These suppliers,
therefore, have to provide reasonable pricing. This makes the bargaining power of suppliers
a weaker force within the industry.

How UCWL can tackle the Bargaining Power of Suppliers?

•UCWL can purchase raw materials from its suppliers at a low cost. If the costs or products
are not suitable for UCWL, it can then switch its suppliers because switching costs are low.
•It can have multiple suppliers within its supply chain. For example, UCWL can have
different suppliers for its different geographic locations. This way it can ensure efficiency
within its supply chain.
•As the industry is an important customer for its suppliers, UCWL can benefit from
developing close relationships with its suppliers where both of them benefit

(C) Bargaining Power of Buyers

•The number of suppliers in the industry in which UCWL operates is a lot more than the
number of firms producing the products. This means that the buyers have a few firms to
choose from, and therefore, do not have much control over prices. This makes the bargaining
power of buyers a weaker force within the industry.
•The product differentiation within the industry is high, which means that the buyers are not
able to find alternative firms producing a particular product. This difficulty in switching
makes the bargaining power of buyers a weaker force within the industry.
•The income of the buyers within the industry is low. This means that there is pressure to
purchase at low prices, making the buyers more price sensitive. This makes the buying
power of buyers a weaker force within the industry.
•The quality of the products is important to the buyers, and these buyers make frequent
purchases. This means that the buyers in the industry are less price sensitive. This makes the
bargaining power of buyers a weaker force within the industry.
•There is no significant threat to the buyers to integrate backwards. This makes the
bargaining threat of buyers a weaker force within the industry.

How UCWL can tackle the Bargaining Power of Buyers?

•UCWL can focus on innovation and differentiation to attract more buyers. Product
differentiation and quality of products are important to buyers within the industry, and
UCWL can attract a large number of customers by focusing on these.
•UCWL needs to build a large customer base, as the bargaining power of buyers is weak. It
can do this through marketing efforts aimed at building brand loyalty.
•UCWL can take advantage of its economies of scale to develop a cost advantage and sell at
low prices to the low-income buyers of the industry. This way it will be able to attract a large
number of buyers.
 (D) Threat of Substitute Products or Services

•There are very few substitutes available for the products that are produced in the industry in
which UCWL operates. The very few substitutes that are available are also produced by low
profit earning industries. This means that there is no ceiling on the maximum profit that
firms can earn in the industry in which UCWL operates. All of these factors make the threat
of substitute products a weaker force within the industry.
•The very few substitutes available are of high quality but are way more expensive.
Comparatively, firms producing within the industry in which UCWL operates sell at a lower
price than substitutes, with adequate quality. This means that buyers are less likely to switch
to substitute products. This means that the threat of substitute products is weak within the
industry.

How UCWL can tackle the Threat of Substitute Products?

•UCWL can focus on providing greater quality in its products. As a result, buyers would
choose its products, which provide greater quality at a lower price as compared to substitute
products that provide greater quality but at a higher price.
•UCWL can focus on differentiating its products. This will ensure that buyers see its
products as unique and do not shift easily to substitute products that do not provide these
unique benefits. It can provide such unique benefits to its customers by better understanding
their needs through market research, and providing what the customer wants.

(E) Rivalry Among Existing Firms

•The number of competitors in the industry in which UCWL operates are very few. Most of
these are also large in size. This means that firms in the industry will not make moves
without being unnoticed. This makes the rivalry among existing firms a weaker force within
the industry.
•The very few competitors have a large market share. This means that these will engage in
competitive actions to gain position and become market leaders. This makes the rivalry
among existing firms a stronger force within the industry.
•The industry in which UCWL is growing every year and is expected to continue to do this
for a few years ahead. A positive Industry growth means that competitors are less likely to
engage in completive actions because they do not need to capture market share from each
other. This makes the rivalry among existing firms a weaker force within the industry.
•The fixed costs are high within the industry in which UCWL operates. This makes the
companies within the industry to push to full capacity. This also means these companies to
reduce their prices when demand slackens. This makes the rivalry among existing firms a
stronger force within the industry.
•The products produced within the industry in which UCWL operates are highly
differentiated. As a result, it is difficult for competing firms to win the customers of each
other because of each of their products in unique. This makes the rivalry among existing
firms a weaker force within the industry.
•The production of products within the industry requires an increase in capacity by large
increments. This makes the industry prone to disruptions in the supply-demand balance,
often leading to overproduction. Overproduction means that companies have to cut down
prices to ensure that its products sell. This makes the rivalry among existing firms a stronger
force within the industry.
•The exit barriers within the industry are particularly high due to high investment required in
capital and assets to operate. The exit barriers are also high due to government regulations
and restrictions. This makes firms within the industry reluctant to leave the business, and
these continue to produce even at low profits. This makes the rivalry among existing firms a
stronger force within the industry.
•The strategies of the firms within the industry are diverse, which means they are unique to
each other in terms of strategy. This results in them running head-on into each other
regarding strategy. This makes the rivalry among existing firms a strong force within the
industry.

How UCWL can tackle the Rivalry Among Existing Firms?

•UCWL needs to focus on differentiating its products so that the actions of competitors will
have less effect on its customers that seek its unique products.
•As the industry is growing, UCWL can focus on new customers rather than winning the
ones from existing companies.
•UCWL can conduct market research to understand the supply-demand situation within the
industry and prevent overproduction.

Implications of Porter Five Forces on UCWL

By using the information in UCWL five forces analysis, strategic planners will be able to
Understand how different factors under each of the five forces affect the profitability of the industry.
A stronger force means lower profitability, and a weaker force means greater profitability. Based on
this a judgement of the industry's profitability can be made and used in strategic planning
 4. SWOT Analysis

SWOT analysis is a vital strategic planning tool that can be used by Udaipur Cement Works Ltd(UCWL)
managers to do a situational analysis of the organization . It is a useful technique to understand the
present Strengths(S), Weakness(W), Opportunities(O) & Threats (T) UCWL is facing in its current
business environment. It leads to a 2X2 matrix – also called SWOT Matrix.

Strengths

1. Leading Cement Manufacturer in India: JKLC/UCWL Cements has been one of the leading
Cement manufacturers in India. Even though there have been significant capacity additions in
the industry and a slow demand growth in India.
2. Strong dealer network: JKLC/UCWL Cements has a strong dealer network, which has helped the
company to withstand intense competition.
3. Extremely strong in west: The company has a very strong network on the west coast which has
supported sustainable strong market position in Mumbai, Surat. There are pockets which are
covered majorly by JKLC/UCWL cement only.
4. Cost advantage through infrastructure: JKLC has made its processes more efficiently and soured
low priced inputs through which it has been able to achieve a cost advantage.
5. Excellent financial backing: JKLC cements is known to be a financially sound company. Its
financial resources were further increased when JKO (another major player in infrastructure)
invested in JKLC.
6. Marketing consistency: There are two ads of JKLC which are legendary. First is the tagline “India
ab soch karo buland” which caught the attention of consumers all across. The second was the
marketing campaign with the Boxer Vijendra Singh which said that only Platinum cement could
make homes that dont get destroyed even for him. The brand has picked the quality of
“strength” very well and portrayed it regularly and consistently.
7. Research and development and Innovation
8. Production safety and product improvement

Weakness

1. Heavily dependent on Indian market: UCWL/JKLC been geographically concentrated depending

heavily on the Indian market for its revenues. In FY2017, the company earned 99.5 percent from
the Indian market.
2. Lack of product diversification: Unlike many competitors, UCWL does not have diversified
product range. This reduces its potential to expand its market share.
3. Known more for small works: While Ultratech focuses on large contracts and huge buildings,
JKLC is known more for repair works and hence it loses out its brand image where the builder
lobby is concerned.
4. Dependence on few customers- Despite of the premium quality and solid brand name, UCWL is
heavily dependent on few customers. At the present time, UCWL is serving more than 40,000
customers worldwide and company’s fate totally relies on the breath and buying power of those
 customers. Moreover, it is also most likely that company’s strategy is dictated by the needs and
preferences of those customers. UCWL’s tremendous reliance on its few customers could result
in negative consequences if company cannot fulfill the demands imposed.
5. Dependence on distributors
Because marketing side of the business is overlooked, entire marketing arm of the UCWLis
severely reliant on its distributors. Distributors located around the world account for about 45
percent of UCWL’s revenue. Company’s distributors maintain an inventory of JKLCs’ products
and sell directly to a wide range of customers. However, they also sell products from various
rivals of UCWL Inc. This strong dependency on distributors may increase price erosion and the
volatility of sales and thus, company’s revenues and operations might get adversely affected. In
the worst scenario, sales become less predictable because of greater volatility and this may
further increase the uncertainty of demand within the Cement market segment.
6. Lack of strategic marketing power
A strong strategic marketing is the cornerstone of any business organization as it reflects and
compliments the true financial goals of the business entity. The path that leads towards the
achievement of those financial goals is through well-defined and firmly plotted strategies that
directly target the customers.
7. Legacy infrastructure
A good organizational infrastructure contributes to the efficient functioning of organization in
such ways as: open authority relationships, arrangement of communication, encouraging
growth and proper balance of group activities. Basically, infrastructure determines how
innovative, creative, responsive or bureaucratic an organization will be and sets the borderline
of acceptable behaviors. Even though, legacy infrastructure became the term of the past and
probably may not remain in use, UCWL is likely still utilizing the bequest infrastructure which has
already being considered as obsolete. Utilization of old infrastructure may cause critical issues as
increased vulnerability of governance, weakened or inadequate integration and collaboration
between departments and lack of strong strategy and operation techniques and methods. Thus,
it can be regarded as the weakness of the organization as it might have an effect on business
intelligence and operational reporting that can be significant.
Opportunities

1. High growth in Cement Industry: India is the second leading cement producer in the world. The
country’s cement production is expected to grow at high speed. This creates an opportunity for
UCWL to tap the demand created.
2. Investment on infrastructure to grow: The investment in infrastructure is expected and has this
creates demand for cement in the country. The planning commission had predicted an
investment of $1 trillion during the 12 th five-year plan.
3. Benefits due to GST: Cement Industry is going to be benefited with GST as overall taxation going
to drop from current 25 per cent to about 18 per cent. Also, logistics cost is also to be decreased
by GST.
4. Make in India: With the government’s initiatives to increase production in India ,UCWL/JKLC
being a core India company, can see many advantages.
5. Increase production: The cement industry runs on the basis of “Who can produce the most”. As
on date, Ultratech has the highest production capacity. But even Ultratech runs out of supply at
times and the demand is high. Thus, an increased production can help the brand reach new
heights.

Threats

Litigation for cartelization in the industry: After the complaints from Builders Association of India (BAI),
the Competition Commission of India (CCI) published an order to stop cartelization in the Cement
Industry.

Intense Competition: There is a lot of competition in the cement industry for Indian as well global
companies. This allows limited market share in the industry.

• Exchange rate fluctuations

The determination of exchange rate and its forecasting are very complex and slippery. Fluctuations of
exchange rate changes affect the well-being of companies, investors, and beyond of all consumers
directly or indirectly.