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CASE STUDY: EEL & VOLTAS LTD.

HIREN SANGHAVI SUNIL PRASAD CHIRAG MEHTA

UNDERSTANDING THE CASE


KEY ROLES
1. 2. 3. 4.

5.

SURESH KUMAR, RMM-E, EEL. PRADEEP DASGUPTA, SALES ENGINEER, EEL. MURLI BHASIN, GM(MATERIALS), VOLTAS LTD. PROJECT MANAGER, VOLTAS LTD. PURCHASE EXECUTIVE, VOLTAS LTD.
COMPETITORS 1. ABB 2. KIRLOSKARS 3. SIEMENS

ENTITITES INVOLVED
1. 2. 3.

EASTERN COALFIELDS VOLTAS LTD. ELECTRICAL EQUIPMENT LTD.

The case furnishes details of EEL(Electric Equipment Ltd.), an electric motor manufacturing company, and their meeting with VOLTAS Ltd., purely for negotiation purpose.

It states, the flame-proof motors market was served by only reputed manufacturers like EEL, ABB, Kirloskars & Siemens. All the players have a good reputation for quality and performance of motors.
There are no small players in flame-proof motor market.

NEGOTIATING TERMS
1.

2.

EASTERN COALFIELDS TO VOLTAS LTD. DEADLINE for installation of pumps: 31st MAY, 1990, following which a penalty of 0.5% per week is applicable with a ceiling of 10%. To be manufactured as per Indian standards. VOLTAS LTD. TO EEL Apart, from 20% discount additional 15%. Freight, installation, warranty, ASS to be borne by EEL. EEL TO VOLTAS LTD. BASIC PRICE OF THE ORDER: Rs. 5,00,000/DISCOUNTED AMOUNT: Rs. 4,00,000/DELAY PENALTY: 0.5% per week with a ceiling of 5%. Installation free, one year warranty. Additional discount of 12%.

1.
2. 1.

2.
3. 4. 5.

Other Observations

Mr. Pradeep Dasgupta has good relations with finance, purchase and project people at VOLTA Ltd., at Kolkata. Mr. Murli Bhasin has been recently transferred to the Kolkata office of VOLTAS Ltd.

1. What are your comments on the strategy adopted by Mr. Suresh Kumar during negotiations

2. What alternative strategy Mr. Suresh Kumar could have adopted?

3. What style of negotiation Mr. Murli Bhasin was adopting and why?

4. Do you think Mr. Suresh Kumar was right in allowing only 12% additional discount while Voltas Ltd. Was demanding 15%

Mr. Murli Bhasin was very aggressive in his negotiations. He was being very straight forward about his companys expectations with a view to putting pressure on EEL.
It comes naturally as Mr. Bhasin had recently shifted to Kolkata office and he would like to give his best. Another point, Mr. Bhasin being a strong negotiator, he will definitely try to get more concessions.