INDIAN INSTITUTE OF MANAGEMENT
Cool King Limited:
To be or not to be in Window Air-conditioner line of merchandise?
The window air-conditioner business provides a fabulous business hazard for us to register high revenue growth and intensify profitability. However, this immature-sprung(prenominal) business should be conducted on an entirely tender set of rules framed by competition and technology evolution. We demand to fundamentally change and reorganise ourselves to effectively compete in this new (product oriented) business. The implications of such a change to our existing portfolio of businesses should be carefully evaluated before we decide to venture on this new business opportunity. It is precisely this trade off required in our approach to business combined with a careful judgment of opportunities and associated risks that would determine our presence or absence in the new business opportunity.
Chairman and CEO, Cool King Limited
Product, Industry Characteristics, and film Drivers
Market Size: The Indian air-conditioner market in 2002 was estimated to be Rs. 3,300 crore growing at 20-25 % annually. Of these, central air-conditioner, including packaged and ducted air-conditioner systems, was around Rs.
1,300 crore and the window and split air-conditioners market was around Rs.2,000 crore.
Players: The industry consisted of three kinds of companies: MNCs, Indian companies and unit assemblers. The MNCs included Carrier, Hitachi (with Amtrex) and Fedder Llyod. The leading Indian companies were Voltas, Amtrex, Shriram, Godrej, Blue supporter and Videocon. While the MNCs sold on brand and premium image, the Indian companies sold on established credibility. The assemblers (usually regional players) competed on footing with an acceptable quality. The assemblers accounted for more than 50% market share.
Tax twist: Air-conditioner (AC) was considered a luxury product, and therefore subjected to high duty structure. The esteem of excise...If you want to get a full essay, order it on our website: Orderessay
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