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PRODUCTION
Production is the act of converting and transforming input into outputs. Every firm carried out the act of production. In the production process, a firm combines various inputs in different quantities and proportions to produce different levels of outputs. This act of production leads to the product differentiation and monopolistic competition in market. Input refers to anything that is used by the firm in the process of production. Thus input include every type of productive resource Land, Labour, capital, times, human energy as well as knowledge which are employed by the firm for producing a commodity.

PRODUCTION FUNCTION Production function is technological-physical relationship between inputs and outputs. Production function shows technique of production output that can be obtained from various levels of factor inputs. Types of production functions: 1. The Law of Diminishing Marginal Returns. 2. The Law of Variable Proportions. 3. The Law of Returns to Scale.

MONOPOLISTIC COMPETITION Monopolistic competition is commonly found in many fields, especially in retail trade, in the service industries, and in some branches of manufacturing. In the manufacturing field, the Fast moving consumer goods industry, automobile industry etc monopolistic competition is common. In the distribution field (retail business), monopolistic competition prevails in such trades as cloth stores, chemist and drug stores, electrical appliances stores, liquor stores, grocery stores etc. PRODUCT DIFFERENTIATION Product differentiation is the unique feature of monopolistic competition. Through product differentiation each seller acquires a limited degree of monopoly power. Product differentiation relating to quality and characteristics of the product. There are many ways of making products different from one another. Branding: Branding is the most common and essential aspect of unique identification of product .Products of different firms may have physical differences in their functional features-The mode of use and operations etc .Size, design and style, strength and durability, differences in the quality of materials, chemical composition, workmanship, cost of inputs etc. There may be differences relating to trademarks and brand names, colour and packing etc. By resorting to product improvement and giving a new brand name to it, the producer hopes to have more inelastic demand for his product as well as a demand curve.

PHARMACEUTICAL INDUSTRY
The pharmaceutical industry develops, produces, and markets drugs licensed for use as medications. Pharmaceutical companies are allowed to deal in generic and/or brand medications and medical devices. They are subject to a variety of laws and regulations regarding the patenting, testing and ensuring safety and efficacy and drugs. The main aim of a particular Pharmaceutical Industry is to develop research and distribute drugs in order to provide health care for the people in the society. PRODUCTION OF PHARMACEUTICALS Production of pharmaceuticals in developing countries may be seen as helping to stimulate industrial policy and/or as stimulating pharmaceutical access to needed medicines. However, if a developing country with manufacturing facilities is able to finish off bulk active ingredients sourced from developed or other countries at high costs, such manufacture may have no impact whatever on patient access to needed medicines. There has been some critical thinking in the past regarding whether or not small developing countries should make their own pharmaceuticals, but no recent comprehensive summary of the issues and policy options. Schematic block diagram of a pharmaceutical manufacturing process

NEED FOR PRODUCING PHARMACEUTICAL PRODUCTS IN ECONOMIC PERSPECTIVE Why a manufacturer would want to make something rather than buy it: the desired quality is not available; the need to maintain design and process secrecy; the fact that suppliers are unreliable; the desire to control ones own production scheduling (it being easier to adjust to shifting supply/demand); the desire to develop a local employment base; the need to increase technology transfer; the wish to become self sufficient in medicines; the need to reduce reliance on imports and manage foreign exchange flow; and the desire to produce medicines for export.

LEADING PRODUCERS

JOHNSON AND JOHNSON With fortune 500 ranking of 103 is worlds most respected business in pharmaceuticals with a Total Revenue of $63,747 billion. Johnson & Johnson's brands include numerous household names of medications and first aid supplies. Among its well-known consumer products are the Band-Aid Brand line of bandages, Tylenol medications, etc. Product Portfolio The Pharmaceutical segment's broad portfolio focuses on unmet medical needs across several therapeutic areas: oncology; infectious disease; immunology; neuroscience; cardiovascular and metabolism. It includes products in the anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, urology and virology fields. Consumer Products Baby Care Products for the ones you love. JOHNSONS JOHNSONS BEDTIME JOHNSONS HEAD-TO-TOE FRAGRANCE FREE BABY LOTION DESITIN NATUSAN PENATEN PRIMAG

Skin & Hair Care Care for your skin and hair. BEBE CLEAN & CLEAR PURPOSE ROC VENDOME NEUTROGENA JOHNSONS SHOWER TO SHOWER skin ID ROGAINE AVEENO LUBRIDERM AMBI SKINCARE PIZ BUIN

Wound Care & Topical Care for cuts, scrapes, rashes and itching. BAND-AID Brand Adhesive Bandages BENGAY CALADRYL NEOSPORIN CORTAID SAVLON

Oral Health Care Care for your whole mouth. LISTERINE REMBRANDT LISTERINE WHITENING REACH

Service Differentiation Delivering HIV Education: This program was intended for boys and girls play soccer and who are suffering with AIDS Hope against Cancer: A campaign meant for cancer patients. Serving Farmer Community: Introducing products benefiting the small and marginal farmers.

PFIZER
Fortune 500 ranking of 152, Pfizer was founded by cousins Charles Pfizer and Charles Erhart in 1849, our pharmaceutical company has remained dedicated to discovering and developing new, and better, ways to prevent and treat disease and improve health and well being for people around the world Product Portfolio Pfizer produces Lipitor (atorvastatin, used to lower blood cholesterol); the neuropathic pain/fibromyalgia drug Lyrica (pregabalin); the oral antifungal medication Diflucan (fluconazole), the antibiotic Zithromax (azithromycin), Viagra (sildenafil) for erectile dysfunction, and the antiinflammatory Celebrex (celecoxib) (also known as Celebra in some countries outside the USA and Canada, mainly in South America).

Consumer Products Anti-infectives Oxytetracycline 500mg Capsules (Oxytetracycline) TERRAMYCIN SF Capsules (Oxytetracycline)

Anti-fungal FUMYCIN (Fluconazole)

Cardiovascular Multi-vitamin BECOSULES Capsules (B-Complex with Vitamin C) BECOSULES Syrup (B-Complex with Vitamin C) BECOSULES-Z Capsules (B-Complex with Vitamin C and Zinc)

RANBAXY LABORATORIES LIMITED

It is a pharmaceutical company that was incorporated in India in 1961. The company went public in 1973 and Japanese pharmaceutical company Daiichi Sankyo gained majority control in 2008. Ranbaxy exports its products to 125 countries with ground operations in 46 and manufacturing facilities in seven countries

Service Differentiation Ranbaxy Laboratories Inc. (RLI) is committed to developing a distinguished branded pharmaceutical business. The foundation for establishing the branded business rests on three strategic pillars: Licensing/acquisitions In-house product development Marketing Alliance

Consumer Products Acne - Desquam-X Anti-fungal Anti-itch Dry Skin Tropical Steriods o Ultravate o Halog o Kenalog Spray

BIOCON LIMITED
It is an Indian pharmaceutical company, with products and research services ranging from preclinical to clinical development through to commercialization. Within biopharmaceuticals, the Company manufactures generic active pharmaceutical ingredients (APIs) like Statins and Immunosuppressants that are sold in the developed markets of the United States and Europe. It also manufactures biosimilar Insulins, which are sold in India as branded formulations and in both bulk and formulation forms. Established in 2004, Biocon Foundation has been working in Karnataka, to improve access to healthcare services at costs that are within the reach of poorer communities. Biocons portfolio consists of 36 key brands across the four therapeutic divisions of
Diabetology, Nephrology, Oncology and Cardiology.

Diabetology In 2009, the division launched its first insulin analog, BASALOGTM, in the Indian market. It can be used just once a day and is effective for 24 hours. Both INSUGEN and BASALOGTM are being developed for registration in Europe and USA between 2012 and 2016. BLISTO-MFTM and METADOZE-IPR are Biocons oral anti-diabetic formulations while OLISATTM is an oral antiobesity formulation. Nephrology ERYPRO safeTM (erythropoietin) is among the top 5 brands in the 30-brand EPO market. RENODAPT, Biocons premium immunosuppressant, mycophenolatemofetil ranks 4th among 25 brands, while the newly introduced immunosuppressant, tacrolimus branded TACROGRAFTM is 3rd among 20 brands. Biocon has newly launched dosage forms like TACROGRAFTM 3 mg, RENODAPT 750 mg, RENODAPT-S 540 mg and RAPACANTM 2 mg to suit Indian patient needs through ideal dosage, enhanced compliance and reduced pill burden. In 2009, Biocon launched a specially formulated protein supplement, NARITA+TM in the renal nutrition segment, for dialysis patients suffering from malnutrition. Oncology This divisions BIOMAb EGFR, approved in 22 countries, is a successful formulation for indications like head-and-neck cancers, both adult and paediatric glioma, and nasopharyngeal carcinoma. Abraxane, launched in July 2008, is being used to treat metastatic breast cancer and also other tumors such as pancreatic cancer, non-small cell lung cancer and ovarian cancer. It is a first-inclass, innovative treatment regimen designed to address unmet needs associated with solvent-based paclitaxel such as hypersensitivity reactions, increased myelosuppression and axonal degeneration. NUFIL safeTM for the treatment of chemotherapy-induced neutropenia is among the top 10 brands in the filgrastim segment. Cardiology With major brands like STATIX (anti-cholesterol) and TELMISAT (anti-hypertensive), Biocons cardiology division is now ranked number 22nd in its representative market. Biocons CLOTIDETM is the leading eptifibatide brand in India and MYOKINASETM (met-free streptokinase) is a lifesaving injectable. Other brands like ACTIBLOKTM-IPR (metoprolol) and the newly launched BESTOR (rosuvastatin) and BRADIATM (ivabradine) are also from this division. Service Differentiation Biocons integrated health care initiative works along three levels: Level 1 Preventive Health Level 2 Primary Health Care Through Arogya Raksha Yojana (ARY) Clinics Level 3 Tertiary & Secondary Care (Hospitalization)

Arogya Raksha Yojana (ARY) Micro Health Insurance GLAXO SMITH KLINE It is the world's third-largest pharmaceutical company measured by revenues (after Johnson & Johnson and Pfizer). GSK has a portfolio of products for major disease areas including asthma, cancer, virus control, infections, mental health, diabetes and digestive conditions. It also has a large consumer healthcare division which produces and markets oral healthcare and nutritional products and over-the-counter medicines including Sensodyne, Boost, Horlicks and Gaviscon. Product Portfolio Nutritional Boost 'Boost is the secret of winning energy!' Maltova The yummy choco-malt drink' Viva Start to a bright and healthy day!' Viva has VitaHealthTM - a combination of 9 essential Vitamins [Vitamin A, D, B1, B2, Niacin, Vitamin B6, Folic acid, Vitamin B12 & C], Iron, Calcium and Phosphorous. Horlicks Horlicks Ninja Junior Horlicks Mothers Horlicks Horlicks Lite Horlicks Buscuits

ECONOMIC DEVELOPMENT ACTIVITY OF PHARMACEUTICALS

In an ideal world, pharmaceutical companies would devote their vast research resources to searching for long-shot cures for major scourges such as Alzheimer's disease. They would sponsor trials to help doctors figure out what treatments work best and are most cost-effective. They would develop drugs and vaccines against malaria, schistosomiasis, and other Third World diseases, even though there's little chance of making money off them. And they wouldn't threaten cuts in research and development for breakthrough medicines whenever politicians challenged their ability to charge high prices. Exportability In order to analyse the exportability of the pharmaceutical products beside supply related factors one has to take the following aspects into consideration: 1. The regional demand for pharmaceutical products concerning affordability and 2. Acceptability of drugs and how local producers are able to meet it. This includes geographical and physical accessibility and standards. In the following the study refers to regional demand including price sensitivities. Subsequently possible barriers to accessibility will be discussed. The discussion focuses on prices and price sensitivity, regulation, transportation and storage as well as on trade barriers. Prices and price sensitivity Prices of pharmaceuticals are not entirely derived from the demand and supply mechanism, but depend on different variables.94 It is difficult to compare drug prices worldwide. Prices vary among countries and even in one country the same medicine is sold at different prices to the public, private not-for-profit (PNFP) or the private for-profit (PFP)

IMPACT OF GLOBALISATION ON PHARMACEUTICALS

The pharmaceutical industry has taken advantage of the modern trend of globalisation to increase their assets and influence in medical healthcare across the globe. Companies spend large amounts of money on advertising, marketing and lobbying (government or parliament i.e. the decision-making body). The industry spends roughly US$19 billion a year for that sole cause. In some countries, such as the United State s of America, companies are allowed to promote their firms or products directly to the public. Consequently, this has allowed some companies to specialize in data and analytics for pharmaceutical marketing. An example of this phenomenon is Yellowikis, to name one out of many. There have also been drastic improvements to the state of third-world countries. In China, the portion of the population living with a daily income of $1-$2 per day was decreased by 52% in 28 years. This was due to the countrys participation in the World Trade Organisation and in effect, a direct participation in globalisation. Under the rules of the World Trade Organisation, a developing country

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has options for obtaining needed medications under compulsory licensing or importation of cheaper versions of the drugs, even before patent expiration. There have also been drastic improvements to the state of third-world countries. In China, the portion of the population living with a daily income of $1-$2 per day was decreased by 52% in 28 years. This was due to the countrys participation in the World Trade Organisation and in effect, a direct participation in globalisation. Under the rules of the World Trade Organisation, a developing country has options for obtaining needed medications under compulsory licensing or importation of cheaper versions of the drugs, even before patent expiration.

EXPORTS AND IMPORTS OF PHARMACEUTICALS

There is the view that in the post-1991 period, Indias exports of drugs and pharmaceuticals have grown rapidly thereby confirming that India has much to gain by conforming to global drug patent standards. But a close reading of the data shows that the growth of the main drug exports has slowed, while that of imports especially formulations has accelerated. This can be explained with the following diagram

CONCLUSION
For the largest three pharmaceutical firms, viz, Ranbaxy, Dr Reddys and Cipla, exports in terms of values were more than half their total sales turnovers. Therefore, for these firms, foreign markets were relatively more important than the domestic market, and this gave them the impetus to improve their operating efficiencies.

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AUTOMOBILE INDUSTRY
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads. India's largest car manufacturing industry hub is based in and around Chennai, also known as the "Detroit of India" with the India operations of Ford, Hyundai, Renault and Nissan headquartered in the city and BMW having an assembly plant on the outskirts. Chennai accounts for 60 per cent of the country's automotive exports. Gurgaon and Manesar in Haryana are hubs where all of the Maruti Suzuki cars in India are manufactured. The Chakan corridor near Pune, Maharashtra is another vehicular production hub with companies like General Motors, Volkswagen, Skoda, Mahindra and Mahindra, Tata Motors, Mercedes Benz, Land Rover, Fiat and Force Motors having assembly plants in the area. Ahmedabad with the Tata Nano plant and planned Ford and Peugeot-Citroen plants, Halol again with General Motors, Aurangabad with Audi, Skoda and Volkswagen, Kolkatta with Hindustan Motors, Noida with Honda and Bangalore with Toyota are some of the other automotive manufacturing regions around the country TWO WHEELERS Hero Honda Splendor, Passion, Cbz Karizma, Hunk, Etc Yamaha FZ, Fazer, SZ, Yamaha Spark, Etc Suzuki Sling Shot, GS150R, Access, Etc Honda Unicorn, Shine, Activa, Etc TVS Apache, Flame, Star City and Wego

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PASSANGER CARS AND UTILITY VEHICLES Maruti SX4, Swift, Zen, Alto, A Star, Ritz, Etc Honda City, Accord, Accent, CRV, Etc Hundai Santro, I20, Sonata, Verna and Eon Toyota Corrola, Innova, Altis, Itios, Liva, Etc Tata Indica, Indigo, Manza, Safari, Aria, And Worlds Cheapest Car Nano M&M Scorpio, Bolero, Verito, Xylo and Sux 500 Other Car Makers Ford, Mercedez-Benz, BMW, Audi, Fiat, Renault, Etc

PASSANGER CARRIERS AND TRUCKS Tata, Ashok Layland, Volvo, Eicher, and Mercedez -Benz.

INDIAN TWO WHEELERS Hero Honda Hero Honda is a motorcycle and scooter manufacturer based in India. Hero Honda started in 1984 as a joint venture between Hero Cycles of India and Honda of Japan. The company is the largest two wheeler manufacturer in India.

Bajaj Bajaj Auto is a major Indian vehicle manufacturer started by Jamnalal Bajaj from Rajasthan in the 1930s. It is based in Pune, Maharashtra, with plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal,

Kinetic Kinetic Engineering Limited is an automotive component manufacturer in India which formerly sold two-wheelers under the brand names Kinetic Honda and later Kinetic. In 2008, it stopped selling twowheelers after entering into a joint venture with Mahindra Automobiles,

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TVS TVS is the third largest two-wheeler manufacturer in India and is among the world's top ten. It is the flagship company of the parent TVS Group employing over 40,000 people with an estimated 15 million customers. It manufactures motorcycles, scooters, mopeds and auto rickshaws.

PASSENGER CARS AND UVS Maruti Maruti It is India's largest passenger car company, accounting for over 45% of the domestic car market. The company offers a complete range of cars from entry level Maruti 800 and Alto, to hatchback Ritz, A-Star, Swift, Wagon-R, Estillo and sedans DZire, SX4, in the 'C' segment Maruti Eeco and Sports Utility vehicle Grand Vitara.

Tata motors Tata Motors is Indias largest automobile company, with consolidated net profit of 9,274 crore (US$2.07 billion) in 201011. It is the leader in commercial vehicles and among the top three in passenger vehicles.

BUS AND TRUCK MANUFACTURERS Mahindra and Mahindra The flagship company of the Mahindra Group, a multinational conglomerate based in Mumbai, India. The company was set up in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed, etc.

Tata Tata Motors Limited is Indias largest automobile company, with revenues of 35,651.48 crore (US$7.95 billion) in 200708.[30] It is the leader in commercial vehicles in each segment; trucks made by Tata can be easily seen on Indian roads.

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Ashok Leyland It is a commercial vehicle manufacturing company based in Chennai, India. Founded in 1948, the company is one of India's leading manufacturers of commercial vehicles, such as trucks and buses.

Swaraj Mazda Established in 1983, Swaraj Mazda Limited, an Chandigarh, India based automobile company, is owned by the Sumitomo Corporation of Japan and Punjab Tractors Limited of India, with a technical collaboration with Isuzu and Mazda of Japan.

Eicher Eicher Group is a conglomerate of the firms Eicher Goodearth Ltd., Eicher Ltd., Eicher Motors Ltd., Eicher International Ltd., and ECS Ltd., based in New Delhi, India. The Eicher Company has around 2500 employees located in four manufacturing facilities and 49 marketing and area offices around India. The group has around 600 suppliers of components and sub-assemblies

FOREIGN TWO WHEELERS Honda Honda motors India Limited is a joint venture between the Honda Motor Company of Japan and Siel Limited for the production, marketing and export of passenger cars in India. It began operations in December 1995.It operates production facilities at Greater Noida in Uttar Pradesh and at Bhiwadi in Rajasthan.

Yamaha Yamaha motors in India have been present in the market of low range economy bikes for a long time. All bikes in their store were designed for mass market, but with the introduction of FZ-16, FZ-S, Fazer, and R15 they have made an impression on the mid range bike market in India.

Suzuki Suzuki is Japan's 4th largest automobile manufacturer and the 9th largest automobile manufacturer in the world by production volume. It is operating in india since long back in bike business.

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PASSENGER CARS Toyota Toyota Kirloskar Motor Private Limited is joint venture between Toyota Motor Corporation and the Kirloskar Group, for the manufacture and sales of Toyota cars in India. It currently is the 7th largest car maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra, Chevrolet, and Ford.

Hundai Hyundai Motor India Limited was formed in 6 May 1996 by the Hyundai Motor Company of South Korea. When Hyundai Motor Company entered the Indian Automobile Market in 1996 the Hyundai brand was almost unknown throughout India. During the entry of Hyundai in 1996, there were only five major automobile manufacturers in India,

Ford Ford India Private Limited is a wholly owned subsidiary of the Ford Motor Company in India. Ford India Private Limited's head quarters are located in Chengalpattu, Chennai, and Tamil Nadu. It currently is the 6th largest car maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra and Chevrolet.

Honda Honda Siel Cars India Limited (HSCI) is a joint venture between the Honda Motor Company of Japan and Siel Limited for the production, marketing and export of passenger cars in India. It began operations in December 1995.It operates production facilities at Greater Noida in Uttar Pradesh and at Bhiwadi in Rajasthan. The company's total investment in its production facilities in India as of 2010 was over 16.2 billion.

General motors General Motors India Private Limited is a 50:50 partnership between General Motors and SAIC that is engaged in the automobile business in India. It is the 5th largest automobile manufacturing company in India after Maruti Suzuki, Hyundai, Tata Motors and Mahindra

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Mercedes-Benz Mercedes-Benz India is a subsidiary of Daimler AG based in India. Daimler entered the Indian market and set up Mercedes-Benz India Ltd in 1994. The company was later renamed DaimlerChrysler India Private Ltd after the merger of parent company Daimler with Chrysler.

BMW BMW India Private Limited is a wholly owned subsidiary of BMW, headquartered in Gurgaon, Haryana. BMW India made an initial investment of 1.1 billion (US$24.53 million) in its factory in Chennai, Tamil Nadu, with an initial capacity for 3000 cars.

Audi Audi India is the wholly owned subsidiary of German automobile manufacturer Audi. Audi's main competitors in the Luxury vehicles segment in the Indian Automobile Industry are Mercedes-Benz, BMW, Jaguar and Volvo.

TYPE OF MARKET IN INDIA

There is perfect competition in almost every segment of automobile market. After entries of number of foreign auto giants, there is more competition in the market. Due to high competition in the market, companies are trying to produce better products with decreased price. Worlds top 2 car makers, Toyota and GM which are known for high end and costly cars are now introducing cheap cars for Indians.

Market Demand Determinants Determinants of demand for this industry include vehicle prices (which are determined largely by wage, material and equipment costs) and exchange rates, preferences, the running cost of a vehicle (mainly determined by the price of petrol), income, interest rates, scrapping rates, and product innovation.

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ECONOMIC DEVELOPMENT
The auto industry started in 1991 when government de-licensed the sector.Subsequently, the sector was made open for 100% FDI.Since then many large companies have set up their facilities in India. Production was just 2 lakh units in 1991 and now it has rose to 37 lakh units in 2010.Indian roads are now flooded with cars of different brands. Automobile industry contributes 4% of the national GDP and accounts for 5% of the industrial output. This sector provides employment to around 13 million people directly or indirectly.For instance, around 1 lakh people are employed in more than 100 companies which produce components for Hyundais Chennai plant.Total employment is expected to touch 25 million by 2016 in auto sector in India. Thus it contributes greatly to the national income. Automobile industry is currently contributing about 5% of the total GDP of India. Indias current GDP is about $ 1.4 trillion and is expected to grow to $ 3.75 trillion by 2020. The projected size in 2016 of the Indian automotive industry varies between $ 122 billion and $ 159 billion including USD 35 billion in exports. This translates into a contribution of 10% to 11% towards Indias GDP by 2016, which is more than double the current contribution.

MARKET TREND
Some 25 Indian and foreign companies are making their presence in India. Number of vehicles per person has increased from 5 vehicles per 1000 people in 1999 to around 36 vehicles per 1000 person in 2010.Demand for luxary and costly cars are growing rapidly than demand for small cars.For instance, Rolls Royes sells 100 cars every year in India. The Indian Automobile Industry is manufacturing over 11 million vehicles and exporting about 1.5 million every year. The dominant products of the industry are two wheelers with a market share of over 75% and passenger cars with a market share of about 16%. Commercial vehicles and three wheelers share about 9% of the market between them. About 91% of the vehicles sold are used by households and only about 9% for commercial purposes. The industry has attained a turnover of more than USD 35 billion and provides direct and indirect employment to over 13 million people.

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GOVERNMENT POLICY
Prior to the mid 1990's, the Indian automobile sector comprised of indigenous companies. The automobile market in India was however, opened up to foreign investors in 1996. International names like Ford, Hyundai, Toyota, Volvo, Daimler Chrysler and GM Honda were thus, able to make their foray into the Indian automobile sector. Government of India is currently providing various tax benefits on production and imports of components of vehicles. Special benefits are provided for cars less than 3.8 meters in length. Promotion of R&D is done in the automotive sector to ensure continuous technology upgradation Emphasis is on low emission fuel auto technologies and encouragement given to construction of safer bus/truck bodies. Automatic approval for foreign equity investment up to 100% of manufacture of automobiles and component is permitted

EXPORTS AND DOMESTIC SALES

India currently imports high end luxary cars like Rolls Royes. Automobile exports have grown consistently and reached $4.5 billion in 2009.Largest export markets are UK, Italy, Germany, Netherlands, and SA. India with 0.23mn units is the 4th largest exporter of vehicles. Automobile exports from India grew at a robust 29.64 per cent in 2010-11 riding on two-wheelers and commercial vehicles despite a sluggish demand from Europe, one of the main markets for small cars. According to the figures released by the Society of Indian Automobile Manufacturers (SIAM), total exports from the country stood at 23, 39,333 units in last fiscal compared to 18, 04,426 units in the year-ago period.Passenger car exports from India touched 4, 47,403 units in FY'11 as against 4, 41,709 units in the previous financial year, up 1.29 per cent. In 2010-11, India's largest exporter Hyundai Motor saw a decline of 18.41 per cent at 2, 33,069 units.Domestic market leader Maruti Suzuki was a distant second, registering 6.93 per cent fall in overseas sales at 1,36,026 units in 2010-11.

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FOOD INDUSTRY
In Food Industry we are considering two segments. Those are Dairy Industry and Chocolate and Confectionery Industry

LEADING PLAYERS
Leading players in the category of Milk and Milk products are Amul, Nestle, Mother Dairy, Britannia, etc. Leading players in the category of Chocolate and confectionery are Cadbury India Ltd., Nestle India Ltd., Candico India Ltd., Lotte India Co. Ltd., etc

AMUL
Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) is India's largest food product marketing organization with annual turnover (2010-11) US$ 2.2 billion. Its daily milk procurement is approx 12 million lit (peak period) per day from 15,712 village milk cooperative societies, 17 member unions covering 24 districts, and 3 million milk producer members. It is the Apex organization of the Dairy Cooperatives of Gujarat, popularly known as 'AMUL', which aims to provide remunerative returns to the farmers and also serve the interest of consumers by providing quality products which are good value for money.

Birth of Amul

It all began when milk became a symbol of protest Founded in 1946 to stop the exploitation by middlemen Inspired by the freedom movement Milk Amul Lite Amul Taza Amul Shakti Rs.44 Rs.38 Rs.40 1 Litre 1 Litre 1 Litre

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Amul Butter Amul Lite Delicious Table Margarine Amul cooking butter

Rs.29

100gm

Amul Cheese Amul Gouda Cheese Amul Processed Cheese Amul Mozzarella cheese

Rs. 133

400gm Tin

Amul Masti Dahi Amul Probiotic Amul Flaavyo

Rs.16

200gm cup

Varities of beverages Amul cool flavoured milk Amul cool milk shake Amul cook lassi Amul spiced buttermilk

EXPORTS AND DOMESTIC SALES GCMMF is India's largest exporter of Dairy Products. It has been accorded a "Trading House" status. GCMMF has received the APEDA Award from Government of India for Excellence in Dairy Product Exports for the last 13 years.For the year 2009-10, GCMMF has been awarded "Golden Trophy' for its outstanding export performance and contribution in dairy products sector by APEDA. Amul products are available in different countries. Those are USA,ST Marteen,Qatar, Kenya, Shri Lanka, China, Japan, Malasia, Thailand, New Zealand, ect. The Sale Turnover for the year 2010-2011 is Rs. 9774 Crores (US $ 2.2 Billion).

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NESTLE INDIA
Nestl India is a subsidiary of Nestl S.A. of Switzerland. Nestls relationship with India dates back to 1912, when it began trading as The Nestl Anglo-Swiss Condensed Milk Company (Export) Limited, importing and selling finished products in the Indian market. After Indias independence in 1947, the economic policies of the Indian Government emphasized the need for local production. Nestl responded to Indias aspirations by forming a company in India and set up its first factory in 1961 at Moga, Punjab, where the Government wanted Nestl to develop the milk economy. In 2004, Nestl had around 247,000 employees worldwide, operated 500 factories in approx. 100 countries and offered over 8,000 products to millions of consumers universally. After nearly a century-old association with the country, today, Nestl India has presence across India with 7 manufacturing facilities and 4 branch offices spread across the region.

NESTLE Milk NESTLE Slim Milk

Rs. 43

NESTLE Dahi NESTLE Slim Dahi NESTLE Nesvita Dahi NESTLE Creamy Vanilla

Rs.15

250gm pouch

CHOCOLATE

Munch Milky Bar Dark chocolate Kit Kat

Rs.10 Rs.10 Rs. 60 Rs.10

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BEVERAGES Nescafe classic Nescafe sunrise Premium Nestea Nescafe 3 in 1

EXPORTS AND DOMESTIC SALES The Sale Turnover for the year 2010 is Rs.63, 765.8 Millions. Out of this Rs. 60,228.6 Millions is from Domestic and Rs. 3,537.2 Millions is from Export.

CADBURY INDIA LTD.

Cadbury India Ltd. is a part of Kraft Foods. Kraft Foods Inc. (NYSE: KFT) is a global snacks powerhouse with an unrivaled portfolio of brands people love from 1903. They are proudly marketing delicious biscuits, confectionery, beverages, cheese, grocery products and convenient meals in approximately 170 countries. Cadbury Dairy Milk (CDM) entered the Indian market in 1948. It operates in five categories Chocolate confectionery, Beverages, Biscuits, Gum and Candy. In the Chocolate Confectionery business, Cadbury has maintained its undisputed leadership over the years. CHOCOLATE

Cadbury Dairy Milk Cadbury Dairy Milk Shots Cadbury Dairy Milk Silk

Rs.10

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Cadbury celebrations Bourneville Five star Perk

Rs.100 Rs.60 Rs.10 Rs. 10

BEVERARAGES

Bournvita

Rs. 155

500gm pack

ECONOMIC DEVELOPMENT

DAIRY Till about year 2000, India was not on the radar screen of most international dairy companies, since India was neither a major importer nor an exporter of dairy products. Through the 70s, 80s and 90s India used to take some milk powder and butter oil as aid. Exports from India were insignificantly small. From 2000 onwards, Indian dairy products, particularly milk powder, casein, whey products and ghee started making their presence felt in global markets. The decade of 2000-10 will be recorded in dairy history as the decade of exports. But the next decade will be different. Signs of change are already visible. On one hand, India is finding it difficult to sustain exports of dairy products due to low global prices and high domestic prices. On the other hand, some dairy products and companies from India have been able to make their mark on international markets leading to increase in their exports even when the overall global market sentiment has turned negative. CHOCOLATE AND CONFECTIONERY The category continued on its growth trajectory unscathed, as despite global economic slowdown average consumer discretionary spending power continued to rise. Growth was also driven by ongoing product and brand innovation by manufacturers who sought to increase the consumption occasions for chocolate confectionery as well as strived to cater to the aspirations and purchasing power of the various consumer segments through launches in standard as well as premium categories.

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The chocolate confectionery competitive landscape is dominated by Cadbury India and Nestl India with value shares of 58% and 33%, respectively, in 2008. Both companies were instrumental in building up chocolate confectionery in India in recent decades, with major investments in advertising and brand building over the years. Gujarat Co-operative Milk Marketing Federation is the third largest player and other players are mainly multinationals with a very niche presence in India.Sales of chocolate confectionery are expected to rise to INR54.98bn in 2014 (127m tones).

GOVERNMENT POLICY
DAIRY Liberalization of the Dairy Sector, the cornerstone of Indias milk revolution, has been the cooperative dairy sector which was protected from cheap subsidized imports through quantitative restrictions and by strict control over exports and imports through the State-owned Indian Dairy Corporation. The competition from private sector was controlled through licensing under the Industrial Development and Regulation Act of 1951, which discouraged new entrants into the dairy processing sector. A suitable price-environment was created and is considered as a key for the impressive growth in this sector. All this changed in the early nineties when major financial and trade policy reforms were initiated in all sectors of the Indian economy including the dairy sector. The first step was to encourage private participation and the dairy industry was de-licensed in 1991. That dairy is a lucrative business became obvious when within a year of de-licensing, more than 100 privatelyowned milk processing plants came up in the major milk producing states. Despite their numerical strength, the cooperative sector did not have the capacity to compete against these private players flush with capital and fortified with modern technology. Realising this, the government had to step in again and the Milk and Milk Products Order (MMPO) was issued in 1992 under the Essential Commodities Act (ECA) to regulate production of milk and dairy products. The MMPO reintroduced licensing and also required private players to set up their own zones of procurement (milk- sheds) that were beyond the existing milk-sheds of cooperatives. This was done to check private players from poaching on milk-sheds of the cooperative sector. However, swept by the wave of liberalization, the government again amended the MMPO in 2001 and allowed State governments to grant a one-time license to the private sector, and also abolished renewal of license. In 2003, restrictions on setting up milk processing and milk product manufacturing plants and also the concept of milk- sheds were eliminated. The amended order emphasized sanitary, hygiene, quality and food safety of milk and milk products.

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CHOCOLATE CONFECTIONERY The confectionery market in India has undergone major changes and growth since the opening up of the economy and liberalization of the investment regime in 1991. India became an attractive place for foreign investment and several large multinational companies entered the market for confectionery products. This resulted in its steady growth and gradual transformation from a commodity market to a branded products market dominated by multinational companies. Over the 1998 - 2003 periods, confectionery retail sales have grown more than 55% in value terms and 46% in volume terms, at an average annual rate of 9.5% and 8% respectively. There is a clear trend of faster sales growth in value terms, indicating that consumers are increasingly ready to pay a premium for higher value products.

MARKET TREND
DAIRY Indias milk production will continue to grow at about 3 per cent per annum in spite of difficulties. The growth of the organized dairy sector is expected to increase rapidly in the next five years reaching values worth US$ 29 Billion by 2016. The reports expect that by 2016 around 26% of the dairy market will be organized compared to 19% in 2010. CHOCOLATE CONFECTIONERY Polarization of consumers in urban and rural areas as well as manufacturers efforts in pushing affordable products is driving both the premium and affordable segments for chocolate confectionery. More premium product offerings such as Cadburys Dairy Milk Silk, Chocolat Stella, and Lindt were visible in modern grocery retailers, seeking to target urban dwellers whereas the mass segment saw expanded volume sales as manufacturers aggressively pushed chocolate confectionery priced at Rs1, Rs2 and Rs5. The economic situation in smaller cities and towns is also expected to improve and coupled with increased penetration of affordable chocolate confectionery products priced around Rs2 and Rs5 per pack, this is projected to improve per capita volume consumption over the forecast period.

CONCLUSION
By considering all these companies we analyzed various factors such as Government Policy, Market Trend, Economic Development, Price Differentiation, Product Differentiation, etc and how these factors affect the production process.

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CASE STUDY

Xerox Corporation (Xerox, a popular global brand) is the largest photocopier manufacturer in the global market. In the year 2000, the profit-making firm suddenly experienced a huge loss. Data is as follow:
Year End December Total Revenue (TR) Total cost (TC) Gross Profit () Net Income (US $ in Mn)

1998 1999 2000 2001 2002 2003

19,593 19,567 18,751 17,008 15,849 15,701

19,104 17,649 19,118 16,680 15,745 15,265

597 1,908 -367 328 104 436

273 1,339 -273 -94 91 360

The companys share prices fell down from US $64 in May 1999to US $4.69 in December 2000.The Companys CEO gave the following reasons for business down swing (especially, the declining sales): Customers Y2K fears. Brazils weak economy. Huge sales force reorganization [Taking Knowledge Management in too big a dose].

However, the critics pin pointed the following factors pertaining to internal lines to be the main cause of the companys bad performance: Accounting irregularities, particularly in its Mexico operations. Bad Debt provisions.

Solution: Turnaround Strategy The Companys top official in the management were changed in 2000.Anne Mulcahy, the new CEO implemented a turnaround strategy. This strategy mainly involved the sales of assets to raise income up to US $4 billion & cost cutting up to US $1 billion. In December 2000, Xerox sold out its Chinese operation to Fuji Xerox for US $550 million. The firm cut-down its work-force by over 30% from 98,000 in 1999 to 67,800 by end 2002.The firm encouraged voluntary retirement.

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The company bears a strong internal culture which responded effectively. The company resorted to outsourcing the manufacturing of office products. This led to cost reduction of US $600 mn. Total reorganization & restructuring of manufacturing operations. Maintaining only the things we do really well, said Anne Mulcahy(the CEO). Investment in products development, technologies & solutions. In 2003, the firm introduced several new products such as Doculolov 3535 Printer-Copies, Xerox Copies Assistant, Docu Print 425 & 850, Flow Port; Xerox 20101, etc. Xerox today provides smart document management to large corporations & graphics arts customers. Xerox gradually reduced its participation in non-core business. Xerox tried to keep its expenses low.

Overall impact of turnaround strategy was a better performance of the Xerox & revival of its profits: US $360mn in 2003. However, as Professor Ram Baliga(2004) of Wake Forest University has commented at present stage, one does not know how much of the performance improvements in this turnaround strategy is caused by the rationalization of operations & how much owing to strategy changes. [Source: Dutta S. and S. Jampani (2004): Xerox Corps Turnaround Strategy Case Folio, November]

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SUMMARY

Xerox Corporation, a popular global brand suddenly experienced a huge loss. The companys share prices fell down from US $64 in May 1999to US $4.69 in December
2000.

CEO gave the following reasons:

o Customers Y2K fears. o o Brazils weak economy. Huge sales force reorganization [Taking Knowledge Management in too big a dose].

However, the critics pin pointed the following factors:

o Accounting irregularities, particularly in its Mexico operations. o Bad Debt provisions.

Anne Mulcahy was appointed as the new CEO. She implemented a turnaround strategy. Overall impact of turnaround strategy was a better performance of the Xerox & revival of its
profits.

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What Has Happened? Decline in Sales

25000

20000

15000 Total Revenue 10000 Total Revenue Gross Profit 5000

0 1998 -5000 1999 2000 2001 2002 2003

Problems Occurred Post 1999

Thomas Prediction became true. Sales Decline. Drop in Share price. December 2000 stock price fell to its lowest. Customers Y2K Fear. Low economic activity in Brazil. Expenses were increasing. Core business nearly shifting importance.

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TURNAROUND STRATEGY
Xerox sold out its Chinese operation to Fuji Xerox for US $ 550 million Cost - Reduction Strategy Reduction in expenses Reduced participation in non-Core business Work-Force cut down Reduction in outsourcing the production of Office products. (Cost reduction US $ 600 MN)

Development and Improvement Strategy Invested in products development, technologies and solutions. New products introduced like Xerox 20101, Xerox Copies Assistant, Docu Print 425, Flow port etc. Provide smart document management to large corporations and graphics arts customers. Total reorganization and restructuring of manufacturing operations Bears strong internal culture

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CONCLUSION

By keeping the company steadfastly focused on customers and employees, she was able to lead Xerox away from the brink of collapse to become one of the world's most profitable and innovative technology and service enterprises. Through a "back to basics" approach and a renewed focus on operational efficiency, the company cut its capital expenditures by 50 percent; reduced its sales, general, and administrative expenses by one-third; and slashed its total debt in half. All the while, Xerox strengthened its core business by maintaining an organization-wide focus on innovation. The perspectives Mulcahy gained by actively listening to customers, shareholders, and employees at all levels of the company allowed her to pinpoint specific hidden weaknesses in the organization. They were actually focused on the source of the fuel leak, which really became critically important to fixing the real problems. If you are a big company, the only way to deliver progress quickly is to get people aligned around a common set of objectives. Otherwise, it looks good but it doesn't stick. Mulcahy explained that every executive at Xerox is now tied to specific key accounts they are responsible for and this builds a culture of customer connectedness. Listening to customers who had a perspective on what was wrong with the company. One spends as much time listening as talking, that's time well spent." Crisis is a very powerful motivator. It forces you to make choices that you probably wouldn't have made otherwise. It intensifies your focus, your competitiveness, your relentless desire to attain best-in-class status.

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BIBLIOGRAPHY www.google.com www. hindustanstudies.com www.just-food.com www.euromonitor.com www.amul.com www.nestle.in www.cadburyindia.com Managerial Economics - Dr. D. M. Mithani