SUBMITTED BY Group 8 KIRTI M.SIDDAPUR SANA NABI MANDANNA T.M SUDIPTA SAR ROHAN
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CONTENTS
OPERATING DIVISIONS
Engineering & Construction Projects (E&C) Heavy Engineering (HED) Construction
Electrical & Electronics (EBG) Machinery & Industrial Products (MIPD) IT &
Technology Services
KEY FACTS
Founded: 1938 Number of employees: 35000(2007) Revenue: US$ 8.50 Billion (2009)
Headquarters: Mumbai, India.
VISION
The L&T vision reflects the collective gaol of the company. It was drafted through
a large scale interactive process which engaged employees at every level,
worldwide.
ORGANISATION STRUCTURE
CORE COMPETENCIES
• • • Innovation Planning Technology
TECHNOLOGY SERVICES L&T provides its global clients with the winning edge through
the development of optimal solutions. L&T's e-engineering services leverage the
Company's own engineering heritage and experience. The Embedded Systems unit
provides technological assistance across a broad spectrum - design, maintenance,
re-engineering, testing, prototyping and industrial design.
PORTFOLIO OF PRODUCTS & SERIVCES
The following are the portfolio of products and services offered by L&T 1.
Engineering & Construction – Projects(EPC) L&T’s engineering and construction
track record consists of successful implementation of turnkey projects in major
core and infrastructure sectors of the Indian industry. L&T has integrated its
strengths in process technology, basic and detailed engineering, equipment
fabrication, procurement, project management, erection and construction and
commissioning, to offer single- point responsibility under stringent delivery
schedules. It is the only Indian EPC company pre- qualified for executing large,
process-intensive projects for oil and gas, refinery, petrochemical and fertiliser
sectors. The various sectors for which L&T has done turnkey projects are Oil and
Gas, water, Power, Cement and allied machinery, Engineering services and Railway
projects. 2. Heavy Engineering:
L&T is acknowledged as one of the top five fabrication companies in the world,
with engineering and manufacturing capabilities that are among the most sought
after in industry. Operating at the higher end of the technological spectrum, L&T
has led the way in introducing new processes, products and materials in
manufacturing. It has the logistics capabilities of fabricating and supplying
over- dimensional equipment to tight delivery schedules. The products in this
category include hydrocrackers, reactors, heat exchangers, polymerization reactors
etc. Shipbuilding Shipbuilding represents a new thrust for L&T in the high
technology manufacturing space and is in line with its strategic growth
objectives. L&T is developing a shipyard capable of constructing vessels of up to
150 metres in length and displacement of 20000 tonnes at its heavy engineering
complex at Hazira near Surat on India’s west coast. The focus will be on
construction of commercial vessels, warships for the navy and the coast guard.
Construction The Engineering Construction & Contracts (ECC) division of L&T is
India’s largest construction organisation. Its leading edge capabilities cover
every discipline of construction – civil, mechanical, and electrical and
instrumentation. L&T has also expanded its focus to the Middle East, South East
Asia, Russia, CIS, Mauritius, African and SAARC countries. It also has keen
interest in the markets of Indian Ocean rim countries, Africa and Latin America.
Construction includes construction products like support structures etc. They also
provide construction services like Fire Protection, Building Automation (IBMS),
Vertical Transportation, Plumbing and Sanitary, Surveillance and Security Systems,
Telecommunication networks, Electrification, Kitchen, Laundry, Water and Effluent
management, Medical equipment for buildings Electrical & Electronics L&T is a
major international manufacturer of a wide range of electrical and electronic
products and systems. In the electrical segment, the Company holds leadership
position in low tension switchgear in India, and is rapidly establishing itself in
international markets. Its products are widely sold in markets in Europe and
Australia. Recently, L&T set up a new manufacturing base for high-end air circuit
breakers in China. It joined hands with Saudi Arabia’s reputed house of Kanoo to
offer a range of high-end intelligent electrical systems to Saudi Arabian market.
L&T also manufactures custom- engineered switchboards for industrial sectors like
power, refineries, petrochemical and cement. In the electronic segment, L&T offers
a wide range of meters and provides complete control and automation systems for
industries. Medical equipment and systems manufactured by it include advanced
ultrasound scanners and patient monitoring systems. They also manufacture medical
equipments like ECG machines, electrosurgical diathermies and ultrasound scanners
etc.
Information Technology Larsen & Toubro Infotech Limited, a 100 per cent subsidiary
of L&T, offers comprehensive, end-to-end software solutions and services with a
focus on Manufacturing, BFSI and Communications & Embedded Systems. It provides a
cost cutting partnership in the realm of offshore outsourcing, application
integration and package implementation. Machinery & Industrial Products L&T
manufactures markets and provides service support for critical construction and
mining machinery – surface miners, hydraulic excavators, aggregate crushers,
loader backhoes and vibratory compactors.
PRODUCTS
EPS Refinery Oil & Gas Petrochemicals Fertilizers Coal Gasification Aero space
Thermal Power Nuclear Power
EEPS Switchgear Electrical Systems Metering Systems Medical Equipment Control
Petroleum Dispenser
MVI
SHIP BUILDING
The offerings are divided into two parts – i) Project Executions ii) Products The
projects are executed not only in the domestic sector, also in the international
locations. The credentials what it has earned over the last decades has made a
distinct branding for the companies. The latest order of Rs. 6900Cr from Mahagenco
has established the company in the international Power Equipment Business. The
industrial products like the welding products, Valves, Switchgear, Metering
Systems are known for high standard technologies & relaiblity.
PEOPLE & PROCESSES
Company recognises that people are the real source of competitive advantage. It is
through people that ECC delivers total customer satisfaction. These values are
reflected in our Human Resources practices which have earned national recognition
several times. The employee goes through a process of continuous learning,
assisted by training programmes. Apart from on-the-job training and technical
training, over 100 programmes on general management and behavioural topics are
conducted each year. Interactive CD-ROM based programmes have enabled employees
learn at their pace. ECC has always believed in experimentation with and
implementation of new ideas. HR practices such as collaborative performance
appraisal, career & succession planning, team rewards have been institutionalised.
An extensive and rigorous recruitment process ensures quality induction. L&T's
Graduate Engineer Trainee recruitment process covers India's major engineering
colleges and institutions. Programmes, plant visits and comprehensive information-
sharing facilitate induction. Division has an ongoing organization development
programme, which is one of the longest sustaining OD efforts in India. The basic
principles of Human Resources policies include
• • •
WORK CULTURE
Work culture emphasises: · Freedom to experiment · Continuous learning and
training
· Transparency · Quality in all aspects of work · Rewards based on performance and
potential A majority of L&T’s processes are ISO certified and comparable with the
best in the world. The company has an on time/ on budget project completion rate
higher than the average for its industry, which translates to highly predictable
construction & Engineering services delivery for its clients.
MAJOR COMPETITORS
&
MARKETING STRATGIES CORPORATE SOCIAL RESPONSIBILITY
HEALTH
L&T's participates in building a healthy community through continuing initiatives
in several areas of healthcare, with a focus on mother & child care and HIV/AIDS
awareness. All L&T locations, including construction sites, have in-house AIDS
awareness programs. Five additional mother & child care centres were set up in
2006-07. In partnership with local NGOs, these centres benefit children of
commercial sex workers, street children and tribal communities. Through health
care centres and regular family camps L&T organizes health checkups, provides
gynaecology and laboratory facilities, carries out free cataract surgeries and
intra ocular lens implants, and helps maintain health data for children. Supply of
equipment and aid for orphanages and physically challenged children, periodic
counselling to combat rampant alcoholism, awareness camps on childcare,
reproductive health, sanitation, dental check-up, provision for safe drinking
water, cancer awareness etc. are other healthcare activities that L&T supports.
EDUCATION
L&T's diverse and sustained programmes in education provide underprivileged
children with learning opportunities through supply of educational materials,
teaching aids, recreational tools and up scaling school infrastructure. L&T also
enriches children's lives through programmes like summer camps, maths coaching,
providing facilities like science laboratories, scholarship to deserving students,
etc. The vocational training institutes of the Larsen and Toubro Public Charitable
Trust provide local communities with skill-based training in Formwork, Masonry,
Agro Mechanics, Electricals, Fabrication, Welding and Housekeeping. Various
diploma courses are also conducted by L&T Institute of Technology for the children
of employees. L&T has developed training modules in local languages in six centres
across India for imparting skills sets in construction. L&T Training Centres
provide courses for improving the standards of electrical engineering practices
and for upgrading knowledge of maintenance, repair and welding.
ENVIRONMENT
Global warming: at L&T, we have always been conscious of the need to maintain
harmony with the environment. We continuously seek newer environment-friendly
approaches in all
our operations – energy conservation, exploring alternative sources like wind and
solar energy, waste water reduction, etc. The Zero Discharge approach of the Powai
Campus saves over 350,000 litres water every day through water treatment and
recycling. More than 13,500 trees have been planted in different L&T campuses in
the last year, and an additional 4,000 saplings were distributed among local
communities.
PARTNERSHIP
ENGINEERING & CONSTRUCTION
i) L&T-Sargent & Lundy Limited A joint venture with Sargent & Lundy (USA), it
offers a complete range of engineering and design services for the power sector.
ii) Larsen & Toubro (Oman) LLC A joint venture between L&T International FZE and
The Muscat Trading Co. LLC
iii) Bangalore International Airport Limited (BIAL):
5) L&T-Demag Plastics Machinery Limited A 50:50 joint venture of L&T and Demag
Plastics Group, Germany, it is the market leader in
India, involved in the manufacturing of a range of injection moulding machines for
processing of thermoplastics and thermosets. The joint venture partner, Demag
Plastics Group, Germany is a world leader in the field. 6) EWAC Alloys Limited A
joint venture of L&T and Messer Eutectic Castolin Holding GmbH, Germany. It
manufactures special purpose welding electrodes, brazing rods, welding and
soldering fluxes, powder alloys and delivery systems, flux-cored welding wires,
cold repair compounds and wear plates.
GLOBAL STRATEGY
Railway bridge construction in Western Thailand in 1956. It was later immortalized
by the film “The Bridge on the River Kwai”. It was obstructed by the companies
from Germany & Japan. So, it concentrated on smaller orders to build its
credibility. In 1976, it got the subcontract for Abu Dhabi International Airport
which was the landmark for its credibility. It was in the mid-90s when the Indian
government had initiated the liberalization process that L&T revisited its options
overseas. Due to its prior experience in the UAE, the Middle East was an obvious
choice. To build up a reputation as a quality provider of engineering and
construction services, L&T management decided to follow a policy of “Take only
what you can deliver”, bidding for contracts only when it was confident of timely
completion. Based on the business policies of the Gulf countries, L&T went for
joint ventures wherever required to secure contracts. In 1994, L&T Oman LLC was
established as a joint venture with The Zubair Corporation, a leading business
group of the Sultanate of Oman. In the UAE, L&T registered as an independent
corporation in 1996. In Saudi Arabia, L&T established a joint venture called L&T
Saudi Arabia LLC in 1999. In 2001, L&T incorporated a wholly owned subsidiary
called L&T International FZE at Sharjah to provide project consultancy, equipment
lease services and maintenance of plant and machinery in the Gulf region. By mid
2006, almost all the Emirates had announced infrastructure plans, the total cost
of which was estimated to be approximately $270 billion over the next ten years.
Recognizing the growth potential, L&T’s management decided to expand its resource
base and opened new offices in Dubai, Sharjah and Ras al Khaima in addition to Abu
Dhabi. Some of the prestigious projects executed by L&T include four bridges at
Palm Island, residential buildings at the Dubai Marina and construction of Raysut
Cement Plant, Oman. Exhibit 1 provides a detailed list of projects successfully
executed by L&T E&C in the Middle East.
Apart from the Gulf region, L&T E&C also gradually expanded its overseas
operations to Russia, the CIS countries and China. Projects executed include a
hydrogen reformer package for Dalian petrochemicals in China, turnkey construction
of international hotels at Uzbekistan and construction of residential township at
Zernograd, Russia.
GLOBAL PRESENCE
PROMOTIONAL STRATEGIES
For the offerings like Turnkey Projects, Construction Projects, Engineered
Products & Systems, IT, Financial services, Shipbuilding, the company directly
maintain relationship with the customers. Promotional strategies adopted by the
organisation are: • Trade Shows
•
• •
The EEPI & MVI categories are dependent on the respective distributors. The sales
reps of the company along with the distributors market those products.
As how it has achieved the excellence of being Asia highest How it as created a
level of performance and innovation through its engineering How it is serving to
the needs of its customers & consumers by providing them with revenues generated
plus consumer satisfaction. More over for Konkan Railways, the project achieved is
a matter of pride but For L&T it is merely creative & Innovative & Planned design
based on what started with an imagination & now has taken a practical shape.
•
•
• •
DISTRIBUTION CHANNELS
Distribution Channels at L&T –Various Divisions It has a global supply network
with offices in 10 locations worldwide, including Houston, London, Milan,
Shanghai, and Seoul.
L&T Construction Division: All the distribution is project based, and the sales
are made through direct marketing. This is a Zero Level Channel Structure and this
enables direct control to L&T project development teams.
L&T Engineering Equipment: The equipment is dealt through dealers and other
channels of delivery where the equipment sale can be made through dealers e.g.,
turnkey, valves etc
The sales pitch is made and followed up and detailed later on by the Dealers
present in the Area, The distribution network is based on each geographical area.
Agency Portal Mobile Based Agency Management Solution Agency - Carrier Interface
Solution these services enable insurance carriers to retain its top agents, while
developing an attractive proposition to attract new agents.
L&T EmSys: The channel of distribution is entirely corporate sales based, and
project based, which is a Zero Level Channel structure. The projects are acquired
through Relationships and a few dealers. The Distribution is entirely dependent on
the Customers requirement. The overseas offices of EmSys are located in USA,
Europe and Japan along with a network of Business Associates in various places.
Larsen & Toubro e-Engineering Solutions This subsidiary focuses on providing
engineering solutions using PLM technology. It provides engineering services. It
operates from off-shore engineering centres at Vadodara, Chennai and Bangalore
with onsite teams to cater to engineering requirements of global clients, many of
them Fortune 500 companies.
Larsen & Toubro Valves Business Group The marketing network is supported by an
experienced team of valve specialists. The distribution is completely project
based, and the teams develop relations with the customer to meet requirements. It
is a leading global supplier of industrial valves and customized solutions for
major Refinery, LNG, GTL, Petrochemical and Power projects. Larsen & Toubro
InfoTech: The channel of delivery is again a zero level structure, wherein a
project is handled just like a TCS or an Infosys to achieve maximum control and no
Intermediaries.
PRICING STRATEGY
Price management is the disciplined method to understand the various cost
components of transaction and to enforce a process to eliminate unstructured
decision, thereby lead to improve the bottom line growth. Companies today are
under great to increase the value for their shareholder on one hand and to satisfy
continuous demand for the customers on the other hand.
Penetration strategy:
L&T acquired TAMCO switch gear in Malaysia. After the acquisition the switch gear
products were sold at a very low price so as to attain a significant market in
Malaysia. Grasim and L&T deal: LNT and Grasim deal lead to increased consolidation
in the cement industry. This deal leads to increase in consolidation in the cement
industry and considerable improvement in the cement prices. Demand has been
growing consistently and on the other there is less increase in capacity. Demand
growth, driven by construction demand such as roads and housing, was over 8-9 per
cent per annum over the medium term, lifting cement demand to 125 million
tonnes in FY05 from the 107 million tonnes in FY03. As the giants have
consolidated they enjoyed monopoly to a certain extent and increased the cement
prices to some extent. Multinational players would become marginal players. In
fact, the biggest MNC player in India, Lafarge, had only a 3 per cent market
share. Five Indian companies owned 55 per cent market share and the rest of the
market were shared by 44 players of median capacity of 1.2 million tonnes. Any
potential player would have to make several acquisitions to gain market shares
comparable with the top Indian players.
Bid price
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for
a good. It is usually referred to simply as the "bid." L&T has been engaged itself
in several bids with one of the most successful being of Rs 300 crore order for
construction of the ductile iron spun pipe (DISP) plant of KIOCL Ltd, earlier
known as the Kudremukh Iron Ore Company Ltd, the public sector undertaking under
the ministry of steel and mines. KIOCL plans to set up a 100,000 tonnes per annum
DISP plant at Mangalore as part of its diversification. L&T emerged as the L1
bidder for the project. The KIOCL board shortlisted L&T through a global bidding
route for the proposed project.
Waterfall Strategy
A popular strategy followed by L & T Ltd. Is the price waterfall strategy (also
called Pocket price waterfall). It is the set of prices, price adjustments and
cost elements that defines how list price gets to net price and how net price gets
to net margin. Price waterfall depicts the build up of L & T ltd’s engineering
products prices from a base price to the list price and then the discounts that
are given to the dealers to get to the Invoice price, the rebates terms, bonuses
and other Discounts that affect the Pocket Price, the Pocket margin based on Cost
of Goods sold and the Net margin based on the other fixed costs. The Price
Waterfall Strategy shows the different prices that are included in the pocket
price to get to the dealers price for the L&T Ltd. Engineering and electrical
products.