SWOT Analysis of Ultra Tech Cement Industry

SWOT Analysis of revolutionary tech Cement IndustryThe SWOT analysis ab pop out basal Tech cementumumum and its position in the market. The social club is one of the gritty hat in the cement industry, analysing it with the different cloth of analysis in order to judge the actual situational and industrial position of the lodge in order to find out how actually is the go with doing.The accompany is cladding a lot of problem regarding its promotion and marketing techniques callable to which it faces a short of aw arness in the market due to which people ar non aw ar of the yield but instead of all the problems it is kind of stable and maintain its position in the market. After performing work up analysis of the company by reviewing porters 5 forces and pestel analysis companys strategic rest and positioning exhaust been analysed.Currently the company is having a better standing(a) as little terror of entry is really low due to eminent initial funds required to establish the factory setup.Contents introduction revolutionary Tech is Indias biggest exporter of cement clinker. The companys take congeals turn over increase across eleven incorporated atomic number 18a, one white cement plant, twelve attrition units and five terminals four in India and one in Sri Lanka. Most of the plants have ISO 9001, ISO 14001 and OHSAS 18001 certification. In addition, two plants have outcome ISO 27001 certification and four have received SA 8000 certification. The process of certification is at present started for the left over plants. The company exports over 2.5 one thousand thousand slews per annum, which is somewhat 30 per cent of the countrys total exports. The export market comprises of countries nigh the Indian Ocean, Africa, Europe and the nerve centre East.Export is a pressure area in the companys strategy for growth. Worlds purloin 10 cement companies comprises of Ultra Tech Cement Limited. The company has an yearly force of 48.8 million tones, and manufactures and markets ordinary in that location is irruption furnace slag cement and There is Pozzolana cement. The companys subsidiaries are Dakshin Cements Limited, Harish Cements Limited there is Ceylinco (P) Limited and Ultra Tech Cement Middle East Investments Limited. (Kalesh, 2009)SWOT ANALYSISSTRENGTHSCement choose has grown in tandem with wholesome economic growth derived from offset in housing sector (over 30%) key solicit driver. root word contrives manage ports, airports, power projects, dam irrigation Projects.National Highway Development Programme.Bharat Nirman Yojana for boorish infrastructure and rise in industrial projects.ProductionThe companys deed facilities are spread across 11 integrated plants, one white cement plant, 12 grinding units and 5 terminals, 4 in India and one in Sri Lanka. High quality cement production is increasing annually.Annual production capacity is 23.10 million tones.Use of high-end equipment such as the Gam ma poetic rhythm Machine and the X-ray Analyser ensures that each product passing out of company. There is manufacturing facility adheres to international standards of quality andperformance.LogisticsUltra Tech send away directly deal with the limestone tenders and thus the middle man do non affect its follow. social club use the local transporters which provide the efficient exile cost. Thereby reducing the extra expense and making cement to a greater extent economical for the local man to afford.PlantationUltra techs manufacturing plant uses immoderate-modern engine room and imported machinery. Companys Unit at Koala is the only Unit in this sector in India to have a desalination plant. It is utilise for clashing the water needs of the plant and the colony. The waste gases from the cooler are used in the desalination plant. that makes the product recyclable and purlieual friendly thereby contributing to the environment.The Ultra Tech cement manufacturing the greenbelt at companys Units is obviously awesome and is surrounded by trees all around. At some points, company is advancing to achieve the skyline. Only the leaves and the flowers and hear the cacophony of the birds.Companys CSR (corporate social responsibility) activities conk to 127 villages, in proximity to its plants, across the country. (William B. Werther, David B. Chandler, 2010)Brand PositioningIn the world, Aditya Birla separate is the eighth largest cement pretender. Ultra Techs products include Ordinary Portland cement, Portland Pozzolana cement and Portland blast furnace slag cement. The company exports over 2.5 million tons per annum, which is about 30 per cent to the countrys total exports. Ordinary There is cement is the most unremarkably used cement for a wide range of process. Applications cover dry-lean mixes, general ready-mixes, and even high strengthpre-cast and pre-stressed concrete.OPC(ordinary Portland cement) is used for applications, such as mercenary buildin gs, industrial constructions, Multi storied complexes, cement concrete roads and surd obligation floors. PPC ( Portland Pozzolana cement )cement is used forbig construction like dam and thermal powerplant.Distribution ChannelsUltra Techs distribution network is very widely spread out in the country with over 5,500 dealers and 30,000 retailers with its safe distribution channels currently Ultratech is starting to acquire a strong positioning in the market giving head on emulation to its rivals.QualityAll the plants of Ultra tech are ISO 14001 Environment vigilance Systems certified sustain toOHSAS 18001 standards.Clean technologies and processes that combine economic progress and sustainable environment are adopted by the company for better performance. There is plants at Awarpur and Ratnagiri in Maharashtra There is Jafrabad and Magdalla in Gujarat Hirmi in Chhattisgarh Arakkonam in Tamil Nadu Tadipatri in Andhra Pradesh Jharsuguda in Orissa and Durgapurin westside Bengal.The y have won the Capexil certification of Export Recognition Top Exporter -Cement, Clinker, Asbestos and Cement Products for the years 2000, 2002 and2003. Bhartiya Udyog Ratan swag presented to Sh. KYP Kulkarni By Indian Economic Development Research Association (IEDRA) for commodity quality of cement to customer, New Delhi in 2004. (Narayanan, 2007)WEAKNESSESSCement Industry is highly fragmented and it is also highly regionalized and Low harbor commodity makes loony toons over long distances uneconomical.Not available in all the places Ultra tech is not available at all the places as it is not manufactured at all places and all plants are not available everywhere due to which people cannot find it everywhere hence the remuneration margins are affected to a greater extend.Human Resource delinquent to openness in the Ultra techs work culture which is very versed that does not suit forbetter management in corporate . The environment being very informal affects the management a lot as being the management they have to maintain a distance and gibe but due to the openness there is no such social occasion and they face a lot difficulty to control. And Ultra tech has poor man power due to its easy recruiting and selection method.Marketing privation of awareness program for consumers due to low promotion mix the company faces the problem of proper(a) promotion due to which the customers doesnt kat once much about the product resulting into less sales of the product instead of being a ripe product.Lack of marketing mix the company suffers with the problem of proper marketing mix which in return results into the whole confusion produce and the product does not reach to the customers properly and in fact a lot of them dont know about it also.Delay in planning the company being fixed in the outer parts of the city and its plant not being located in every city causes abide in the supply of the product. (Porter, 1988)HealthHighly dusty environment at the tim e of dumping the cement is hazardous forhealth.It affects humans respiratory organisation adversely. Ultra tech is therefore not contributing to society as its corporate social responsibility remains unfulfilled due to some(prenominal) an separate(prenominal) hazards.OthersCement industry is highly fragmented and regionalized as Low note value commodity makes. As transportation over long distances is uneconomical for value sector, so cost of transporting cement is high and this keeps cement from being useful over long distances. In new(prenominal) talks, shipping cement be more than than than the profit from selling it.PESTEL ANALYSISAnalysing the above by dint of pestel framework Ultratech was highly affected by the environmental factors. As cement plants are very harmful for the environment causing a lot of contamination and is harmful for the health of human being hence proving that the environmentally it is not good and hence its plants all are made to be situated out side the city where the population rate is low or no population. So Ultratech is bearing great difficulty in managing the environment along with the health issues.OPPORTUNITIESWith the low per capita employment of cement in India 102 kg compared to the global average of 260 kg and the emphasis on infrastructure development, Ultra tech has ample opportunity to ride the growth curve. Ultratech can develop vernal marketing area. It can sign MOUs (memorandum of understanding) with presidential term regarding supply of cement forgovernment work. Ultratech can also maintain the position of competition in the market. institutional market like corporate and offices, school society complexes are growing in large scale, which result increase the requirement. People are opting for more stable structures and good future, so large use of cement is winning place, so government isspending heavily on infrastructure project as Indian industry base is growing rapidly Thus, this is the ripe time to fully invest in these market. There is regular demand of cement which in turn will increase foreign enthronisation in this sector. As roadstransformation process is going on throughwhich the traditional method of road building will be convert by modern concrete roads. Substantially lower per capita cement consumption as compared to developing countries (1/3 rd of world average) Per capita cement consumption in India is 82 kgs against a global average of 255 kgs and Asian average of 200 kgs. For green field capacity 20 million tons per annum will be required to match the demand in subscriber line for other two years leading to favourable demand supply scenario. (verma, 2008)THREATSAs huge cement industry emerge there is more competition for ACC (Associated Cement Companies) to carefully enhanced its price , product and at the same time satisfy its dealers and customers. Cheap priced brand are capturing like a mushroom to lower income customerbase. Players such as Jaypee Cement , prism Cement, and Birla cement. ACC cement are eating up considerable market share. overdue to India satisfy growth many another(prenominal) new international cement companies are expected in coming years which will bring awful change and can start price war. Government intervention to slump cement prices Transportation cost is upgrading. Due toloading restriction there is overloading industrialist shows increase in costs due to the shortage in coal industry.Many retailers are influence by better profit margin, andother Benefits because of small industries increase competition among them, which in turn give heavy discount to customer and start malpractices.Timber is also being considered as one of the substitutes of cement, which is cheap and long lasting. Due to continuous attack of earthquake, many countries like Japan, Indonesia, Singapore etc are now using timber in construction since those areas are high earthquake affected. (Kalesh, 2009)PORTERS 5-FORCE MODEL(THREAT) A NALYSISAnalysing the above through the five forces frameworkThreat of New Entrants Thehigh costs are major entry barrier for the entry of new players. The high commitment costs make it difficult to import cement. Cement being a high volume low value commodity results in high goods costs, which makes cement imports economically unlikely. Domestic Cement industry is highly integrated from global cement markets. Making cement duty free, as cement is being imported from neighbouring countries. However, due to logistics issues and lack of port, handling capabilities, imports of cement will remain negligible and do not pose a threat to domestic industry of Ultratech.Competitive rivalry between existing players previously the rivalry was strong among the players, as the industry was not consolidated. During the last fewer years the industry has become more consolidated with the Top 3 players Ultratech is having a combined market share of 49 percent in 2005-06 as compared to 32 Percent i n 1999-2000. (Porter, 1988)Its competitive analysis is as followsDomestic players competing Ultratech areAssociated Cement Companies Ltd (ACCL)Associated Cement Companies Ltd manufactures ordinary Portland cement, composite cement and special cement and has begun offering its marketing expertise and distribution facilities to other producers in cement and related areas. The company plans capital expenditure through expansion of existing units and/or through eruditenesss.Birla CorpBirla Corps product portfolio includes acetylene gas, auto trim parts, casting, cement, jute goods, yarn, calcium carbide etc. The cement sectionalisation has an installed capacity of 4.78 million metric tones and produced 4.77 million metric tones of cement in 2003-04. The company has two plants in Madhya Pradesh and Rajasthan and one each in West Bengal and Uttar Pradesh and holds a market share of 4.1 per cent. Going forward, the company is setting up its captive Power plant to remain cost competitive.M adras CementsMadras Cements Ltd is one of the oldest cement companies in the southern region and is a part of the Armco company. The company is active in cement, clinker, dolomite, dry mortar mix, limestone ready mix cements (RMC) and units generated from windmills.Lafarge IndiaLafarge India Pvt Ltd, a appurtenant of the Lafarge Group, has a total cement capacity of 5 million metric ton and a clinker capacity of 3 million tonne in the country. Lafarge commenced operations in 1999 and currently has a market share of 3.4 per cent. It exports clinker and cement to Bangladesh and Nepal. It produces Portland slag cement, ordinary Portland cement and Portland Pozzolana cement.Grasim-Ultra Tech CemcoGrasims product visibleness includes viscose staple fiber (VSF), grey cement, white cement, sponge iron, chemicals andtextiles. With the acquisition ofUltra Tech, L Ts cement division inearly 2004, Grasim hasnow become the worlds seventh largest cement producer with acombined capacity of 3 1million tones. Grasim (with Ultra Tech) held a marketshare of around 21 percent in 2005-06.Gujarat Ambuja Cements Ltd (GACL)Gujarat Ambuja wasset up in1986 with the commencement ofcommercial production at its 2 million tonneplant in Chandrapur, Maharashtra. The group has clinker manufacturing facilities at Himachal Pradesh, Gujarat, Maharashtra, Chattisgarh, Punjab and Rajasthan. The company has a market share of around 10 per cent, with astrong foothold in the northern and occidental markets. Itstotal sales aggregated US$ 526millionwith a capacity of12.6 million tonne in 2003-04. Gujarat Ambuja is one ofIndias largest cement exporter and one ofthe most cost efficient firms. It hasalso earmarked around US$ 195-220 million for acquisitions Cements Ltd.CONCLUSIONAs India is the second largest producer of cement in the worlds many big player presents in the market after that Ultratech cement increases his market share due to the high growth rate of real estate. Because of continuousl y growth of ultra tech cement after little yearcompany whitethorn occur top cement manufacturer in India. After arise analysis of Ultra Tech I found that company has many strength, but few weakness also present, there are several(a) opportunities for companyin Indiaand other Asian countries because the infrastructure is continuously developing. Company has won the best Employer award in 2007, so young multiplication have various career opportunities in it. Overall performance of company is increasing continuouslyin each sectorlike as Production, HR, Marketing it is good for company it is soon about to establish a strong brand name in the industry due to its good quality and reputed image that is making it exclusive from its competitors.