Description
MIRC Electronics, Onida: Complete Analysis
MIRC Electronics Limited
Project Report
Table of Contents
1. Introduction…………………………………………………………2 1.1. Brief Profile……………………………………………….2 1.2. Vision and Mission………………………………………..3 1.3. Corporate Governance and Philosophy…………………..4 1.4. Organizational Structure………………………………….6 1.4.1. Board of Directors…………………………………6 1.4.2. Management……………………………………….7 1.4.3. Organizational Structure Chart……………………8 2. Conductive Factors………………………………………………….9 3. Growth of Organization…………………………………………….10 4. Factors that led to growth and expansion…………………………..16 5. Decline of Organization…………………………………………….19 6. Factors that led to its decline……………………………………….20 7. SWOT Analysis…………………………………………………….24 7.1. SWOT Analysis of MIRC Electronics…………………...25 8. Conclusion………………………………………………………….26 9. Learning from the project…………………………………………...27 10. References…………………………………………………………..28
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1. Introduction
1.1 Brief Profile “Neighbour?s envy, owner?s pride”, is a tagline that any kid can recognize. What is the story behind the famous brand? Onida was started by Mr.G.L.Mirchandani and Mr. Vijay Mansukhani in 1981 in Mumbai. In 1982, Onida started assembling television sets at their factory in Andheri, Mumbai. Today, it has a market capital of about Rs 261.87 crores and employee strength of the company is around 1855. MIRC Electronics Limited consists of two principal brands – Onida, addressing the premium segment of the market and IGO, catering to the mass segment. Products of superior quality and the combination of a distinctive voice, a cutting-edge advertising strategy, and purposeful marketing ensured that Onida became a household name. Today, their product portfolio comprises televisions, LCDs, DVD players and recorders, air-conditioners, washing machines, microwave ovens, mobiles and audio-visual presentation products. From being a predominantly television manufacturing company, MIRC now derives 47% of its revenues from the non-television segment.
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Onida today enjoys a strong equity among consumers making it one of the leading brands in India. Its constant endeavor to introduce products of substance that offer the very best in technology and the finest design have made Onida a leading player in the electronics and entertainment business today.
1.2 Vision and Mission Onida’s Mission: Reflection of continuity and change “To benefit society at large through Innovation, Quality, Productivity, Human Development and Growth, and to generate sustained surpluses, always striving for excellence, within the framework of law, and in nothing but the truth in which we base every action.”
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Onida’s Vision and Values: Reflection of organizational culture “To become a leader in our chosen field and become a globally recognized, prestigious company through synergistic business investment, differentiation through innovation, passion through empowerment, cost through economies of scale and world class systems and procedures that bring in delight of stakeholders.” Onida’s Values: ? ? ? ? ? ? Respect for individual Passion for perfection Achieving the impossible Different and unique Integrity Customer relationship
1.3 Corporate Governance Company’s Philosophy on Code of Governance: Reflection of Organizational Culture ? Commitment to society/nation We respect the society and the environment to which we belong and will contribute to its progress and welfare.
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?
Passion for quality Strive to create products with substance, that are the best in class. Never compromise on quality. Give our customer better value-for-money, always.
?
Fairness We stand for truth, fairness and justice in all our business and individual dealing without this spirit, no man can win respect no matter how capable he may be.
?
People - our greatest assets We value good people. It is our responsibility to create actively and constantly an environment that supports them to grow and flourish.
?
Harmony and co-operation Alone we are weak. Together we are strong. Work together as a family in mutual trust and responsibility.
?
Courtesy and Humility Respect the right of others. Be cordial, modest and humble. Praise and encourage freely.
?
Strive for continuous improvement ( KAIZEN ) Seek and find in every action a way to do things better, always better.
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?
Growth Growth is vital. Increasingly seek out ways and means to constantly move forward.
?
Innovation Progress by adjusting to ever-changing environment around us. As the world moves forward, we must keep-in-step.
?
Gratitude Always repay the kindness of our customers, associates, community, nation and friends worldwide with gratitude.
1.4 Organizational Structure 1.4.1 Board of Directors Mr. Gulu L. Mirchandani (Promoter & CMD) Mr. Vijay J. Mansukhani (Promoter & MD) Mr.Gulu L. Mirchandani
Mr. Manoj Maheshwari (Independent & Non Executive Director) Mr. Vimal Bhandari (Independent & Non Executive Director) Mr. Harsh Mariwala (Independent & Non Executive Director)
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Mr. Ranjan Kapur (Independent & Non Executive Director) 1.4.2 Management Mr. Gulu L. Mirchandani (Chairman &Managing Director) Mr. Vijay J. Mansukhani (Managing Director) Mr. G. Sunder (Chief Executive Officer) Mr. Satyajit Ray (Chief Financial Officer) Mr. S. Ravishankar (Chief Technology Officer-Audio Visual) Mr. C. R. Talati (Vice President-Operations) Mr. Kirti Sen (Vice President-Human Resources) Mr. Sriram Krishnamurthy (Vice President-Marketing, Sales and Service)
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1.4.3 Organizational Structure Chart
Board of Directors
Chairman
R&D
Managing Director
CEO
Quality
Sales & Marketing
Operations
Finance & Accounts
HR Dept.
The Operations department is further structured as:
Operations
Production
Engineering
FPG
Stores / Logistics
Maintenance
Purchase
Planning
Colour Television
Injection Moulding
EPS
Auto Insertion
SKD (Semi Knock Down)
CKD (Complete Knock Down)
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The R&D Department is further structured as:
R&D
ID (Industrial Display)
HA (Home Appliances) LCD TV
ETG (Electronics and telecom Group)
Bangalore
Delhi
Mumbai
The following are the notable features observed while studying the organizational structure: ? Organization has a Product Divisional Structure, whereby the manufacturing function is divided into several different product line and a centralized set of functions then services the needs of all these product divisions. ? Organization is highly focused on Research and Development. That is the reason R&D department is reportable to the Chairman. ? Each product is having a separate R&D department so that equal thrust is given on each product. ? In case of Electronics Development, the R&D center is situated at three different locations i.e. Mumbai, Delhi and Bangalore. This is primarily in view of tapping talent from different part of the country.
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?
Service departments like purchase, planning, stores etc. are kept common for all items. However, production is sub divided for each product. This way organization is kept lean and thin resulting to lower cost of manpower.
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2. Conducive Factors Identified
?
In 1982, the Asian Games at New Delhi took place. MIRC Electronics started the production of CTV during this time. Thus the entry of Onida in manufacturing televisions was ideal as the sale of televisions soared during this period.
?
In 1992, the Economic Liberalization process was initiated. Thus the company could buy the resources like picture tube from the global manufacturers. This helped the company to reduce the costs.
?
The popular “devil ad” with the tagline „Neighbor?s envy owner?s pride? came in 1980s.The face of the devil became the face of the company and the sales boomed. Onida thus gained ground not only over other domestic players like BPL and Videocon but also over global giants like Sony.
?
In 2005 DTH services were started in India. To utilize this opportunity, in 2006, DDMIRC Electronics tie-up to promote Direct Plus channels.
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3. Growth of the organization
MIRC electronics started off predominantly as a television manufacturing company, however it recognized the potential and growth opportunities in other consumer durable products and now it derives 47% of its revenues from the non-television segment. Product portfolio comprises of televisions, LCDs, DVD players and recorders, airconditioners, washing machines, microwave ovens, mobiles and audio-visual presentation products. From the time organization started manufacturing CTVs, it recognized the need of good sound quality along with excellent picture quality, and thus they came up with CTV with good picture quality having up to 3500 watts of sound. In 1983, to take advantage of the technological advances and innovations, MIRC Electronics technically collaborated with Japan Victor Company (JVC), Japan for CTV. In co-operation with JVC, MIRC Electronics were able to develop world-class products. To strengthen the research and development, MIRC Electronics in 1985 established an in-house R&D wing. They have full-fledged R & D centers in Mumbai and Delhi and our R & D engineers are also located in JVC, Japan. „The Onida Devil'- brand mascot , and its punch line “Neighbor?s Envy Owner's Pride” helped MIRC Electronics gain brand awareness for its televisions in the early years. In the 1980s when owning a television set was considered a luxury, Onida launched its advertising campaign on the platform of envy, to promote its television range. The Devil ad engendered a strong emotional pull towards the brand.
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In 1991, the organization started Akasaka Electronics, PCB plant, to manufacture the customized Printed Circuit Board to cater to Onida?s requirements as well as other manufacturers in the electronics industry. As the Onida customers have always been loyal to the brand, the company in 1994 introduced 'ONIDA ARCADES', which were exclusive 'ONIDA' showrooms, situated in the prestigious up market locations to help customers choose from a wide range of Onida televisions.
In 1995,
the Company was awarded ISO 9001 certification during the
period under review. The improved compliance with the laid down Systems & Procedures, Total Quality Management discipline, Cost reduction & Value engineering would go a long way in fine tuning the performance of your Company.
To cater to the needs of different age groups, in 1999 with technical collaboration with JVC, the company has also launched several other products aimed at the
top-end of the market. These include a 42-inch plasma TV, a 29-inch flat TV, and a 29inch swivel base TV. For the young generation, it has launched 14-inch TVs with color bodies called Candy.
Always innovating and keeping customers in mind, MIRC Electronics adopted a marketing strategy to divide their products under two brands-Onida, addressing the premium segment of the market and IGO, catering to the mass segment.
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The Company launched 13 new products, a few of which took even its multinational competitors by surprises.
In 2000,
the company, manufacturer of the Onida brand of television, was electronics by
been awarded the second prize for excellence in consumer The Ministry of Information Technology.
Mirc
Electronics, makers of the Onida band of Television, has joined
hands with Italian Professional designer Gulliano Bellini and SRS labs Inc of the US, to launch a designer 21-inch color television, Profile.
Mirc
Electronics, manufacturers of Ondia telvision, has won the A&M
award in the gold category for its television commercial, Kargil.
The Company has tied-up with the US-based TeleCruz Technology to manufacturer Internet TVs and set-top boxes.
Soon MIRC Electronics realized that the cathode ray televisions market is steadily declining in India and LCDs segment is expected to register 100 per cent growth for the next five years. Thus in 2007 MIRC Electronics launched „Xaria?- the first and only LCD to be indigenously manufactured in India. It was a product which received excellent reviews and it made Indians proud of its “Made In India” label. For this it entered into a
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strategic partnership with the US-based communications and consumer silicon solutions provider, Marvell, to introduce the Qdeo video processing technology in India.
Qdeo, developed by Marvell, delivers natural video, free of artifacts and noise, enhances the colour and scales all video inputs into a high-definition format. MIRC Electronics was the first company to introduce Qdeo in the Indian consumer electronics segment.
Onida jumped 26 positions to retain its 2nd most trusted brand in the durable category 2nd year in a row in the Brand Equity- The Economic Times Survey 2007. During the same year, it was also recognized as the 2nd Most Preferred CTV brand by CNBC Awaaz.
The company expanded globally by opening a branch office in Dubai. With the help of Dubai office Mirc Electronics Ltd. is able to create good presence of ONIDA brand in Middle East & Africa. Apart from Middle East ONIDA products are also available in Russia & Ukraine.
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4. Factors that have led to expansion and growth
During the inception of MIRC Electronics, while they were the first CTV brand, markets had not opened up and expensive and „imported? goods ruled the roost. They through their organizational design have been able to make televisions with the best of features, customized to the Indian viewing needs. The various factors that led to the growth and expansion of MIRC Electronics are: 1. Research and Development The in-house research and development center concentrates to develop new, innovative and quality products in the field of consumer electronics to provide better customer value for money. Thus they work very closely with the marketing and sales department as the products are developed through customer research and customercentric innovation. They have adopted Liason role kind of integrating mechanism. 2. Quality Superior quality is the cornerstone of every Onida product. The rigorous practices and procedures aim at maintaining the highest quality standards at all times. The TQM movement being practiced has enabled process innovation. Due emphasis is given to prevention driven activities through feedback obtained from all over. Product reliability tests are performed with total compliance to international quality assurance standards.
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3. Efficiency Onida's principal assembly operations are conducted in a state-of-the-art plant at Wada, 80 kms from Mumbai. The plant in Delhi caters to the production requirements for the Northern region. The network of 33 branch offices, 208 Customer Relation Center?s and 41 depots across India ensures that Onida products are available on retail shelves. At Onida, it is recognized that it can strengthen the competitive edge if we produce as much as possible from a given capacity at the lowest possible cost. It reduced the time it takes for a single color television to be produced from 20 seconds to 12 seconds and increased the capacity from 0.5 million to 2.5 million sets per annum. They have backward integration for vital components such as PCB, Tuner and Speakers etc. along with in house full-fledged moulding facilities followed by painting shop. In 2002-03, using the existing infrastructure, a decisive step forward was taken by entering into the manufacture of washing machines and air conditioners at the Wada factory. A team of 75 Engineers are at work at the Onida R&D centers in Mumbai and Delhi developing products at the forefront of technology meeting customer expectations.
4. Innovation, Technological Advancement and creativity Onida has been able to sustain in the consumer durable market through their innovation, technological advancement and creativity. It has concentrated on its core competency i.e. television segment along with diversifying into new segments. Movielike experience to TV Programs with Onida KY Theatre, a home theatre built into a
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television, the first such launch in the Indian television industry. The product provides a 5.1 Channel output, independent of whether the source was a mono, stereo or 5.1 channel Dolby stereo recording, done for the first time anywhere in the world. High picture clarity with DVMC (Digital Velocity Modulation Circuit) technology, one of the best in the world, ensures uniform scanning at the centre and corners - the ultimate in flat TV technology with Onida Black. Digital sound with the indigenous efforts of the in-house R&D team helped create the KY Inside technology which has become an industry benchmark in acoustic engineering for televisions. Sustained efforts by the team have helped Onida to create a strong presence in technology-heavy product categories including Plasma and LCD TV''s and presentation products.
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5. Decline of the organization
The highly ambitious launch of Candy, the 14-inch color TV from MIRC Electronics did not perform well in Indian market. Although it did enjoy initial success when it was launched in May 1999, its monthly national sales declined to 3500 units by mid 2001. The company had made huge investments in the project and hence suffered significant losses in this project.
The competition faced by Onida from the Korean companies like LG, Samsung has hugely affected sales of all the products of Onida. Onida, which was once ranked 3rd in 2007 slipped to 5th in 2009.
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6. Factors that led to its decline
1. Internal management problems One of the main reason for the fight between the brothers- Gulu and Sonu Mirchandani and their brother-in-law Vijay Mansukhani is the control over Onida group. The fight has severely eroded the share of the brand and even marketing of Onida. 2. Competitive Rivalry, Bargaining power of buyer, Barriers to Entry, New Entrants and substitute products Michael Porter?s Five Force Model has been used to analyze the above factors that have led to the decline of MIRC Electronics.
Bargaining powers of customers
Threat of new entrants
Bargaining powers of suppliers
Competitive rivalry within an industry
Threat of subsitute products
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In the Consumer Durable sector: 1. COMPETITIVE RIVALRY AMONG INDUSTRY (VERY HIGH) 2. BARGAINING POWER OF BUYER (VERY HIGH) 3. BARGAINING POWER OF SUPPLIER (LOW) 4. BARRIER TO ENTRY (LOW) 5. THREAT OF SUBSITUTES (LOW) In reference to Onida, the Michael Porter?s Five Force Model can be expressed as
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Bargaining power of Suppliers
Supplier concentration Switching Costs Absence of substitutes Threat of Forward Integration Barriers to Entry Government regulation Economies of scale Capital requirement Expected Retaliation Brand Identity Access to distribution Bargaining power of buyers Switching costs Buyer Information Availability Threat of backward Integration Degree of rivalry Industry concentration Threat of substitutes Price-Performance tradeoff of substitutes Buyer inclination towards substitution
Rate of industry growth
Diversity of competitors Brand Equity
Buyer price sensitivity
a. Degree of Rivalry Degree of rivalry denotes the intensity of competition within the industry. Videocon, LG, Samsung, Sony, Onida are the big competitors in the television industry. Due to the onslaught from Korean majors, the profits of most of the companies including Onida have gone down. MIRC Electronics is managing to hold its share by adopting value for money strategy. Sony, Philips, Akai, Sansui, Aiwa, Toshiba and now Hyundai are other foreign brands in the market.
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b. Threat of potential new entrants The low entry barrier makes it difficult for the existing producers to remain profitable.
c. Threat of substitutes Although the threat of substitute is low, internet is emerging as the infotainment medium. Some of the competitors of Onida like BPL have introduced TV that can provide features of internet along with regular features.
d. Bargaining power of buyers Since the cost incurred by the consumer in switching from one television brand to another is practically zero, the brand loyalty is low. Also the market is highly price conscious and promotion driven. When one company comes up with a promotional offer, the other companies have to strategize and come up with better offer to outdo the competitor. Due to high degree of cut in import duties, buyers have an option to choose not only the domestic consumer products but also the foreign-made consumer products.
e. Bargaining power of suppliers Though the bargaining power of suppliers is low but the most critical component in manufacturing television is picture tube, thus the dependency of companies on picture tube supplier is high.
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7. SWOT Analysis
The following are the broad points which have been taken into consideration for SWOT Analysis.
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Strengths
• Technological skills • Leading brands • Distribution channels • Customers loyalty • Production quality • Scale • Management
Weaknesses
• Absence of important skills • Weak brands • Poor access to distribution • Low customer retention • Unreliable product/service • Sub scale • Management
Internal Factors
Opportunities
• Changing customer tastes • Technological advances • Changes in government policies • Lower personal tax • Change in population age • New distribution channels
Threats
• Changing customer base • Closing of geographic markets • Technological advance • Change in govt. policies • Tax increases • Change in population age • New distribution chnnels
Negative
External Factors
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Positive
Page 25
SWOT Analysis of MIRC Electronics
Strengths
• Wide coverage in 450 cites and towns through 33 branch offices and over 3000 authorized dealers across country • Manfacturing capacity of 30,00,000 CTVs at Wada, Mumbai and 5,00,000 CTVs at Roorkee • Strategic Alliance with Japan Victor Company(JVC) for exchange of technologies • First company to focus on video as well as audio experience for its customers • Strong backward integration • R&D and marketing work close together to innovate products which provide customer value for money
Weaknesses
• Less investment on advertisement • Weak promotional strategy • CRT technology is losing popularity • Fewer margins to distributors/dealers • Less focus on unconventional channel of distribution • Not to keep up with the technological advances and innovations done by other companies • Limited product line • Consumers not aware of all products of Onida
Internal Factors
Opportunies
• Movement towards LCD TVs from CRT domain • Consumer goods like refrigerators, microwave and washing machines, have low penetration in the country, representing vast room for future growth • Large potential in rural market • Increased consumer awareness thus products like AC no longer considered as luxury but necessity • Attractive financing schemes driving demand • Increase in exports to South East Asian countries • Spread of awareness of televisions through media, television channels • Increased sales of consumer products through the growth in internet penetration
Positive MIRC Electronics Ltd-Project Report
Threats
• Competition from Korean giants like LG and Samsung • Persistant pressure on margins due to stiff competition • Entry of cheap Chinese product throgh organized retail • Exchange schemes and pricing • Aging customer base
External Factors
Negative Page 26
8. Conclusion
MIRC Electronics which started predominantly as the television manufacturing company, now has a product portfolio comprising of televisions, LCDs, DVD players and recorders, air conditioners, washing machines, microwave ovens, and audio-visual presentation products. Recently it entered the mobile phone segment by introducing low cost dual SIM mobile phones. It also plans to foray into manufacturing of refrigerators. Initially to gain the competitive advantage, the company manufactured CTVs with focus not only on picture quality but also on sound quality. The organization has Product Divisional Structure and since the company gives special emphasis on the R&D, it is directly under the Chairman. The company through its “devil ad” was able to create a huge customer base which it has been able to sustain through its excellent services. Right from the time of inception of the company it has been under severe pressure, first by the expensive and „imported? goods and then by the domestic and global giants after liberalization and reduction of import duties. The company has grown manifolds with the support of an excellent R&D division which is always working towards the development of products which create out-of the world „wow? experience for the consumers. The organization is currently in the maturity stage and unless it works towards conversion of its opportunities into strengths and minimization of threats, it will slide towards decline stage.
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9. Learning from the project
Through this project we were able to understand the organization selected by us and thus performed critical analysis on it. The concepts of Organizational Structure, Culture, and Design were understood in detail through the project. The vision, mission and values, motivates the employees to perform better. It was also seen that an organizational environment is uncertain. The organization through various strategies manages these uncertainties to the best of its abilities. The organization uses its core competencies to achieve competitive advantage. This is very important when an organization has to survive in changing global environment where it faces the threat from many domestic as well as global competitors. To achieve competitive advantage in an uncertain environment, an organization has to continuously and constantly innovate, bring about technological changes and be creative to outsmart its competitors.
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10. References
MIRC Electronics Ltd-Annual Report 2008-2009 http://www.onida.com http://www.scribd.com/doc/8694368/Brand-Onida http://www.indiamart.com/company/1440191/ http://www.business-standard.com/india/storypage.php?autono=356459 http://info.shine.com/company/MIRC-Electronics-Ltd/910.aspx http://info.shine.com/company/MIRC-Electronics-Ltd/910.aspx http://www.livemint.com/2009/04/14205608/Mirc-Electronics-plans-to-star.html http://www.livemint.com/articles/keywords.aspx?kw=Mirc Electronics http://www.thehindubusinessline.com/2006/02/07/stories/2006020702660800.htm http://www.financialexpress.com/news/mirc-electronics-plans-rs-12cr-consumer-promotionspend/65750/ http://www.indianexpress.com/news/mirc-under-its-belt-onida-now-bets-on-mobil/299094/ http://search.informit.com.au/documentSummary;dn=987286021834489;res=IELBUS http://www.thehindubusinessline.com/bline/2006/05/11/stories/2006051103351500.htm http://www.ojs.unisa.edu.au/index.php/MCSJ/article/view/48/33
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doc_995906423.docx
MIRC Electronics, Onida: Complete Analysis
MIRC Electronics Limited
Project Report
Table of Contents
1. Introduction…………………………………………………………2 1.1. Brief Profile……………………………………………….2 1.2. Vision and Mission………………………………………..3 1.3. Corporate Governance and Philosophy…………………..4 1.4. Organizational Structure………………………………….6 1.4.1. Board of Directors…………………………………6 1.4.2. Management……………………………………….7 1.4.3. Organizational Structure Chart……………………8 2. Conductive Factors………………………………………………….9 3. Growth of Organization…………………………………………….10 4. Factors that led to growth and expansion…………………………..16 5. Decline of Organization…………………………………………….19 6. Factors that led to its decline……………………………………….20 7. SWOT Analysis…………………………………………………….24 7.1. SWOT Analysis of MIRC Electronics…………………...25 8. Conclusion………………………………………………………….26 9. Learning from the project…………………………………………...27 10. References…………………………………………………………..28
MIRC Electronics Ltd-Project Report
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1. Introduction
1.1 Brief Profile “Neighbour?s envy, owner?s pride”, is a tagline that any kid can recognize. What is the story behind the famous brand? Onida was started by Mr.G.L.Mirchandani and Mr. Vijay Mansukhani in 1981 in Mumbai. In 1982, Onida started assembling television sets at their factory in Andheri, Mumbai. Today, it has a market capital of about Rs 261.87 crores and employee strength of the company is around 1855. MIRC Electronics Limited consists of two principal brands – Onida, addressing the premium segment of the market and IGO, catering to the mass segment. Products of superior quality and the combination of a distinctive voice, a cutting-edge advertising strategy, and purposeful marketing ensured that Onida became a household name. Today, their product portfolio comprises televisions, LCDs, DVD players and recorders, air-conditioners, washing machines, microwave ovens, mobiles and audio-visual presentation products. From being a predominantly television manufacturing company, MIRC now derives 47% of its revenues from the non-television segment.
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Onida today enjoys a strong equity among consumers making it one of the leading brands in India. Its constant endeavor to introduce products of substance that offer the very best in technology and the finest design have made Onida a leading player in the electronics and entertainment business today.
1.2 Vision and Mission Onida’s Mission: Reflection of continuity and change “To benefit society at large through Innovation, Quality, Productivity, Human Development and Growth, and to generate sustained surpluses, always striving for excellence, within the framework of law, and in nothing but the truth in which we base every action.”
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Onida’s Vision and Values: Reflection of organizational culture “To become a leader in our chosen field and become a globally recognized, prestigious company through synergistic business investment, differentiation through innovation, passion through empowerment, cost through economies of scale and world class systems and procedures that bring in delight of stakeholders.” Onida’s Values: ? ? ? ? ? ? Respect for individual Passion for perfection Achieving the impossible Different and unique Integrity Customer relationship
1.3 Corporate Governance Company’s Philosophy on Code of Governance: Reflection of Organizational Culture ? Commitment to society/nation We respect the society and the environment to which we belong and will contribute to its progress and welfare.
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?
Passion for quality Strive to create products with substance, that are the best in class. Never compromise on quality. Give our customer better value-for-money, always.
?
Fairness We stand for truth, fairness and justice in all our business and individual dealing without this spirit, no man can win respect no matter how capable he may be.
?
People - our greatest assets We value good people. It is our responsibility to create actively and constantly an environment that supports them to grow and flourish.
?
Harmony and co-operation Alone we are weak. Together we are strong. Work together as a family in mutual trust and responsibility.
?
Courtesy and Humility Respect the right of others. Be cordial, modest and humble. Praise and encourage freely.
?
Strive for continuous improvement ( KAIZEN ) Seek and find in every action a way to do things better, always better.
MIRC Electronics Ltd-Project Report
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?
Growth Growth is vital. Increasingly seek out ways and means to constantly move forward.
?
Innovation Progress by adjusting to ever-changing environment around us. As the world moves forward, we must keep-in-step.
?
Gratitude Always repay the kindness of our customers, associates, community, nation and friends worldwide with gratitude.
1.4 Organizational Structure 1.4.1 Board of Directors Mr. Gulu L. Mirchandani (Promoter & CMD) Mr. Vijay J. Mansukhani (Promoter & MD) Mr.Gulu L. Mirchandani
Mr. Manoj Maheshwari (Independent & Non Executive Director) Mr. Vimal Bhandari (Independent & Non Executive Director) Mr. Harsh Mariwala (Independent & Non Executive Director)
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Mr. Ranjan Kapur (Independent & Non Executive Director) 1.4.2 Management Mr. Gulu L. Mirchandani (Chairman &Managing Director) Mr. Vijay J. Mansukhani (Managing Director) Mr. G. Sunder (Chief Executive Officer) Mr. Satyajit Ray (Chief Financial Officer) Mr. S. Ravishankar (Chief Technology Officer-Audio Visual) Mr. C. R. Talati (Vice President-Operations) Mr. Kirti Sen (Vice President-Human Resources) Mr. Sriram Krishnamurthy (Vice President-Marketing, Sales and Service)
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1.4.3 Organizational Structure Chart
Board of Directors
Chairman
R&D
Managing Director
CEO
Quality
Sales & Marketing
Operations
Finance & Accounts
HR Dept.
The Operations department is further structured as:
Operations
Production
Engineering
FPG
Stores / Logistics
Maintenance
Purchase
Planning
Colour Television
Injection Moulding
EPS
Auto Insertion
SKD (Semi Knock Down)
CKD (Complete Knock Down)
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Page 8
The R&D Department is further structured as:
R&D
ID (Industrial Display)
HA (Home Appliances) LCD TV
ETG (Electronics and telecom Group)
Bangalore
Delhi
Mumbai
The following are the notable features observed while studying the organizational structure: ? Organization has a Product Divisional Structure, whereby the manufacturing function is divided into several different product line and a centralized set of functions then services the needs of all these product divisions. ? Organization is highly focused on Research and Development. That is the reason R&D department is reportable to the Chairman. ? Each product is having a separate R&D department so that equal thrust is given on each product. ? In case of Electronics Development, the R&D center is situated at three different locations i.e. Mumbai, Delhi and Bangalore. This is primarily in view of tapping talent from different part of the country.
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?
Service departments like purchase, planning, stores etc. are kept common for all items. However, production is sub divided for each product. This way organization is kept lean and thin resulting to lower cost of manpower.
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2. Conducive Factors Identified
?
In 1982, the Asian Games at New Delhi took place. MIRC Electronics started the production of CTV during this time. Thus the entry of Onida in manufacturing televisions was ideal as the sale of televisions soared during this period.
?
In 1992, the Economic Liberalization process was initiated. Thus the company could buy the resources like picture tube from the global manufacturers. This helped the company to reduce the costs.
?
The popular “devil ad” with the tagline „Neighbor?s envy owner?s pride? came in 1980s.The face of the devil became the face of the company and the sales boomed. Onida thus gained ground not only over other domestic players like BPL and Videocon but also over global giants like Sony.
?
In 2005 DTH services were started in India. To utilize this opportunity, in 2006, DDMIRC Electronics tie-up to promote Direct Plus channels.
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3. Growth of the organization
MIRC electronics started off predominantly as a television manufacturing company, however it recognized the potential and growth opportunities in other consumer durable products and now it derives 47% of its revenues from the non-television segment. Product portfolio comprises of televisions, LCDs, DVD players and recorders, airconditioners, washing machines, microwave ovens, mobiles and audio-visual presentation products. From the time organization started manufacturing CTVs, it recognized the need of good sound quality along with excellent picture quality, and thus they came up with CTV with good picture quality having up to 3500 watts of sound. In 1983, to take advantage of the technological advances and innovations, MIRC Electronics technically collaborated with Japan Victor Company (JVC), Japan for CTV. In co-operation with JVC, MIRC Electronics were able to develop world-class products. To strengthen the research and development, MIRC Electronics in 1985 established an in-house R&D wing. They have full-fledged R & D centers in Mumbai and Delhi and our R & D engineers are also located in JVC, Japan. „The Onida Devil'- brand mascot , and its punch line “Neighbor?s Envy Owner's Pride” helped MIRC Electronics gain brand awareness for its televisions in the early years. In the 1980s when owning a television set was considered a luxury, Onida launched its advertising campaign on the platform of envy, to promote its television range. The Devil ad engendered a strong emotional pull towards the brand.
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In 1991, the organization started Akasaka Electronics, PCB plant, to manufacture the customized Printed Circuit Board to cater to Onida?s requirements as well as other manufacturers in the electronics industry. As the Onida customers have always been loyal to the brand, the company in 1994 introduced 'ONIDA ARCADES', which were exclusive 'ONIDA' showrooms, situated in the prestigious up market locations to help customers choose from a wide range of Onida televisions.
In 1995,
the Company was awarded ISO 9001 certification during the
period under review. The improved compliance with the laid down Systems & Procedures, Total Quality Management discipline, Cost reduction & Value engineering would go a long way in fine tuning the performance of your Company.
To cater to the needs of different age groups, in 1999 with technical collaboration with JVC, the company has also launched several other products aimed at the
top-end of the market. These include a 42-inch plasma TV, a 29-inch flat TV, and a 29inch swivel base TV. For the young generation, it has launched 14-inch TVs with color bodies called Candy.
Always innovating and keeping customers in mind, MIRC Electronics adopted a marketing strategy to divide their products under two brands-Onida, addressing the premium segment of the market and IGO, catering to the mass segment.
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The Company launched 13 new products, a few of which took even its multinational competitors by surprises.
In 2000,
the company, manufacturer of the Onida brand of television, was electronics by
been awarded the second prize for excellence in consumer The Ministry of Information Technology.
Mirc
Electronics, makers of the Onida band of Television, has joined
hands with Italian Professional designer Gulliano Bellini and SRS labs Inc of the US, to launch a designer 21-inch color television, Profile.
Mirc
Electronics, manufacturers of Ondia telvision, has won the A&M
award in the gold category for its television commercial, Kargil.
The Company has tied-up with the US-based TeleCruz Technology to manufacturer Internet TVs and set-top boxes.
Soon MIRC Electronics realized that the cathode ray televisions market is steadily declining in India and LCDs segment is expected to register 100 per cent growth for the next five years. Thus in 2007 MIRC Electronics launched „Xaria?- the first and only LCD to be indigenously manufactured in India. It was a product which received excellent reviews and it made Indians proud of its “Made In India” label. For this it entered into a
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strategic partnership with the US-based communications and consumer silicon solutions provider, Marvell, to introduce the Qdeo video processing technology in India.
Qdeo, developed by Marvell, delivers natural video, free of artifacts and noise, enhances the colour and scales all video inputs into a high-definition format. MIRC Electronics was the first company to introduce Qdeo in the Indian consumer electronics segment.
Onida jumped 26 positions to retain its 2nd most trusted brand in the durable category 2nd year in a row in the Brand Equity- The Economic Times Survey 2007. During the same year, it was also recognized as the 2nd Most Preferred CTV brand by CNBC Awaaz.
The company expanded globally by opening a branch office in Dubai. With the help of Dubai office Mirc Electronics Ltd. is able to create good presence of ONIDA brand in Middle East & Africa. Apart from Middle East ONIDA products are also available in Russia & Ukraine.
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4. Factors that have led to expansion and growth
During the inception of MIRC Electronics, while they were the first CTV brand, markets had not opened up and expensive and „imported? goods ruled the roost. They through their organizational design have been able to make televisions with the best of features, customized to the Indian viewing needs. The various factors that led to the growth and expansion of MIRC Electronics are: 1. Research and Development The in-house research and development center concentrates to develop new, innovative and quality products in the field of consumer electronics to provide better customer value for money. Thus they work very closely with the marketing and sales department as the products are developed through customer research and customercentric innovation. They have adopted Liason role kind of integrating mechanism. 2. Quality Superior quality is the cornerstone of every Onida product. The rigorous practices and procedures aim at maintaining the highest quality standards at all times. The TQM movement being practiced has enabled process innovation. Due emphasis is given to prevention driven activities through feedback obtained from all over. Product reliability tests are performed with total compliance to international quality assurance standards.
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3. Efficiency Onida's principal assembly operations are conducted in a state-of-the-art plant at Wada, 80 kms from Mumbai. The plant in Delhi caters to the production requirements for the Northern region. The network of 33 branch offices, 208 Customer Relation Center?s and 41 depots across India ensures that Onida products are available on retail shelves. At Onida, it is recognized that it can strengthen the competitive edge if we produce as much as possible from a given capacity at the lowest possible cost. It reduced the time it takes for a single color television to be produced from 20 seconds to 12 seconds and increased the capacity from 0.5 million to 2.5 million sets per annum. They have backward integration for vital components such as PCB, Tuner and Speakers etc. along with in house full-fledged moulding facilities followed by painting shop. In 2002-03, using the existing infrastructure, a decisive step forward was taken by entering into the manufacture of washing machines and air conditioners at the Wada factory. A team of 75 Engineers are at work at the Onida R&D centers in Mumbai and Delhi developing products at the forefront of technology meeting customer expectations.
4. Innovation, Technological Advancement and creativity Onida has been able to sustain in the consumer durable market through their innovation, technological advancement and creativity. It has concentrated on its core competency i.e. television segment along with diversifying into new segments. Movielike experience to TV Programs with Onida KY Theatre, a home theatre built into a
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television, the first such launch in the Indian television industry. The product provides a 5.1 Channel output, independent of whether the source was a mono, stereo or 5.1 channel Dolby stereo recording, done for the first time anywhere in the world. High picture clarity with DVMC (Digital Velocity Modulation Circuit) technology, one of the best in the world, ensures uniform scanning at the centre and corners - the ultimate in flat TV technology with Onida Black. Digital sound with the indigenous efforts of the in-house R&D team helped create the KY Inside technology which has become an industry benchmark in acoustic engineering for televisions. Sustained efforts by the team have helped Onida to create a strong presence in technology-heavy product categories including Plasma and LCD TV''s and presentation products.
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5. Decline of the organization
The highly ambitious launch of Candy, the 14-inch color TV from MIRC Electronics did not perform well in Indian market. Although it did enjoy initial success when it was launched in May 1999, its monthly national sales declined to 3500 units by mid 2001. The company had made huge investments in the project and hence suffered significant losses in this project.
The competition faced by Onida from the Korean companies like LG, Samsung has hugely affected sales of all the products of Onida. Onida, which was once ranked 3rd in 2007 slipped to 5th in 2009.
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6. Factors that led to its decline
1. Internal management problems One of the main reason for the fight between the brothers- Gulu and Sonu Mirchandani and their brother-in-law Vijay Mansukhani is the control over Onida group. The fight has severely eroded the share of the brand and even marketing of Onida. 2. Competitive Rivalry, Bargaining power of buyer, Barriers to Entry, New Entrants and substitute products Michael Porter?s Five Force Model has been used to analyze the above factors that have led to the decline of MIRC Electronics.
Bargaining powers of customers
Threat of new entrants
Bargaining powers of suppliers
Competitive rivalry within an industry
Threat of subsitute products
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In the Consumer Durable sector: 1. COMPETITIVE RIVALRY AMONG INDUSTRY (VERY HIGH) 2. BARGAINING POWER OF BUYER (VERY HIGH) 3. BARGAINING POWER OF SUPPLIER (LOW) 4. BARRIER TO ENTRY (LOW) 5. THREAT OF SUBSITUTES (LOW) In reference to Onida, the Michael Porter?s Five Force Model can be expressed as
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Bargaining power of Suppliers
Supplier concentration Switching Costs Absence of substitutes Threat of Forward Integration Barriers to Entry Government regulation Economies of scale Capital requirement Expected Retaliation Brand Identity Access to distribution Bargaining power of buyers Switching costs Buyer Information Availability Threat of backward Integration Degree of rivalry Industry concentration Threat of substitutes Price-Performance tradeoff of substitutes Buyer inclination towards substitution
Rate of industry growth
Diversity of competitors Brand Equity
Buyer price sensitivity
a. Degree of Rivalry Degree of rivalry denotes the intensity of competition within the industry. Videocon, LG, Samsung, Sony, Onida are the big competitors in the television industry. Due to the onslaught from Korean majors, the profits of most of the companies including Onida have gone down. MIRC Electronics is managing to hold its share by adopting value for money strategy. Sony, Philips, Akai, Sansui, Aiwa, Toshiba and now Hyundai are other foreign brands in the market.
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b. Threat of potential new entrants The low entry barrier makes it difficult for the existing producers to remain profitable.
c. Threat of substitutes Although the threat of substitute is low, internet is emerging as the infotainment medium. Some of the competitors of Onida like BPL have introduced TV that can provide features of internet along with regular features.
d. Bargaining power of buyers Since the cost incurred by the consumer in switching from one television brand to another is practically zero, the brand loyalty is low. Also the market is highly price conscious and promotion driven. When one company comes up with a promotional offer, the other companies have to strategize and come up with better offer to outdo the competitor. Due to high degree of cut in import duties, buyers have an option to choose not only the domestic consumer products but also the foreign-made consumer products.
e. Bargaining power of suppliers Though the bargaining power of suppliers is low but the most critical component in manufacturing television is picture tube, thus the dependency of companies on picture tube supplier is high.
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7. SWOT Analysis
The following are the broad points which have been taken into consideration for SWOT Analysis.
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Strengths
• Technological skills • Leading brands • Distribution channels • Customers loyalty • Production quality • Scale • Management
Weaknesses
• Absence of important skills • Weak brands • Poor access to distribution • Low customer retention • Unreliable product/service • Sub scale • Management
Internal Factors
Opportunities
• Changing customer tastes • Technological advances • Changes in government policies • Lower personal tax • Change in population age • New distribution channels
Threats
• Changing customer base • Closing of geographic markets • Technological advance • Change in govt. policies • Tax increases • Change in population age • New distribution chnnels
Negative
External Factors
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SWOT Analysis of MIRC Electronics
Strengths
• Wide coverage in 450 cites and towns through 33 branch offices and over 3000 authorized dealers across country • Manfacturing capacity of 30,00,000 CTVs at Wada, Mumbai and 5,00,000 CTVs at Roorkee • Strategic Alliance with Japan Victor Company(JVC) for exchange of technologies • First company to focus on video as well as audio experience for its customers • Strong backward integration • R&D and marketing work close together to innovate products which provide customer value for money
Weaknesses
• Less investment on advertisement • Weak promotional strategy • CRT technology is losing popularity • Fewer margins to distributors/dealers • Less focus on unconventional channel of distribution • Not to keep up with the technological advances and innovations done by other companies • Limited product line • Consumers not aware of all products of Onida
Internal Factors
Opportunies
• Movement towards LCD TVs from CRT domain • Consumer goods like refrigerators, microwave and washing machines, have low penetration in the country, representing vast room for future growth • Large potential in rural market • Increased consumer awareness thus products like AC no longer considered as luxury but necessity • Attractive financing schemes driving demand • Increase in exports to South East Asian countries • Spread of awareness of televisions through media, television channels • Increased sales of consumer products through the growth in internet penetration
Positive MIRC Electronics Ltd-Project Report
Threats
• Competition from Korean giants like LG and Samsung • Persistant pressure on margins due to stiff competition • Entry of cheap Chinese product throgh organized retail • Exchange schemes and pricing • Aging customer base
External Factors
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8. Conclusion
MIRC Electronics which started predominantly as the television manufacturing company, now has a product portfolio comprising of televisions, LCDs, DVD players and recorders, air conditioners, washing machines, microwave ovens, and audio-visual presentation products. Recently it entered the mobile phone segment by introducing low cost dual SIM mobile phones. It also plans to foray into manufacturing of refrigerators. Initially to gain the competitive advantage, the company manufactured CTVs with focus not only on picture quality but also on sound quality. The organization has Product Divisional Structure and since the company gives special emphasis on the R&D, it is directly under the Chairman. The company through its “devil ad” was able to create a huge customer base which it has been able to sustain through its excellent services. Right from the time of inception of the company it has been under severe pressure, first by the expensive and „imported? goods and then by the domestic and global giants after liberalization and reduction of import duties. The company has grown manifolds with the support of an excellent R&D division which is always working towards the development of products which create out-of the world „wow? experience for the consumers. The organization is currently in the maturity stage and unless it works towards conversion of its opportunities into strengths and minimization of threats, it will slide towards decline stage.
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9. Learning from the project
Through this project we were able to understand the organization selected by us and thus performed critical analysis on it. The concepts of Organizational Structure, Culture, and Design were understood in detail through the project. The vision, mission and values, motivates the employees to perform better. It was also seen that an organizational environment is uncertain. The organization through various strategies manages these uncertainties to the best of its abilities. The organization uses its core competencies to achieve competitive advantage. This is very important when an organization has to survive in changing global environment where it faces the threat from many domestic as well as global competitors. To achieve competitive advantage in an uncertain environment, an organization has to continuously and constantly innovate, bring about technological changes and be creative to outsmart its competitors.
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10. References
MIRC Electronics Ltd-Annual Report 2008-2009 http://www.onida.com http://www.scribd.com/doc/8694368/Brand-Onida http://www.indiamart.com/company/1440191/ http://www.business-standard.com/india/storypage.php?autono=356459 http://info.shine.com/company/MIRC-Electronics-Ltd/910.aspx http://info.shine.com/company/MIRC-Electronics-Ltd/910.aspx http://www.livemint.com/2009/04/14205608/Mirc-Electronics-plans-to-star.html http://www.livemint.com/articles/keywords.aspx?kw=Mirc Electronics http://www.thehindubusinessline.com/2006/02/07/stories/2006020702660800.htm http://www.financialexpress.com/news/mirc-electronics-plans-rs-12cr-consumer-promotionspend/65750/ http://www.indianexpress.com/news/mirc-under-its-belt-onida-now-bets-on-mobil/299094/ http://search.informit.com.au/documentSummary;dn=987286021834489;res=IELBUS http://www.thehindubusinessline.com/bline/2006/05/11/stories/2006051103351500.htm http://www.ojs.unisa.edu.au/index.php/MCSJ/article/view/48/33
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