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SUBMITTED BY: AJAYKUMAR S BAROT

SUBMITTED TO: Dr. K.S. PRASAD


DIVISION: B
ROLL NO: 17M47
G.H. PATEL POST GRADUATE INSTITUTE OF
BUSINESS MANAGEMENT
SUBJECT: BPSM-II
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BATCH: 2017-19
Q: 1) Introduction about ANCHOR by Panasonic:
Established in 1963, Anchor Electricals Pvt. Ltd is a wholly owned subsidiary of the
Panasonic Corporation. Panasonic acquired Anchor, the 50-year-old Indian family-owned
electrical equipment brand, in 2007. The company produces low-voltage electrical switches
and accessories, switchgear and protection devices, wires & cables, lamps & luminaries and
fans. It also sells home automation products from Panasonic.

The companies’ new manufacturing unit has been built at Daman, India. The
investment for the plant has been Rs. 200 crores and will produce a complete range of wiring
devices. The plant's current production capacity is of 240 million units. For the first two years,
the products manufactured at Daman will cater to the domestic market, A post which they will
start exporting to the Middle East. The factory adopts many green features including the
installation of LED lighting, solar panels and use of treated sewage water.

Over the last five decades, Anchor has managed to capture the attention of every citizen
in this country. It started with a humble vision of manufacturing electrical products of
outstanding quality at a time when the market involving electrical switches or wiring devices
was handled by the unorganized sector. Since 1918, Panasonic has offered long-lasting
products with better safety and comfort to customers worldwide. With nearly a century of
experience in research and development of smarter electrical solutions for homes and
industries, Panasonic Corporation has emerged as a global leader in Lighting, Energy and
Indoor Air Quality. Anchor’s experience, skill set, and understanding of the Indian market is
unmatched in the field of electrical products since 1963. With a constantly expanding product
range and growing market share, Anchor is one of the largest domestic manufacturers of
electrical construction materials.

Innovative Solutions for a Brighter Future. - Anchor and Panasonic’s synergy in 2007
resulted in products that cater to better energy generation, management, and conservation. With
Panasonic's cutting-edge technology and Anchor’s vast customer support network, Anchor
Panasonic today delivers a seamless and vast range of innovative electrical, lighting and
ventilation products that exceed global standards. The world of electrical solutions today has
evolved beyond recognition. The prominence of Anchor as India's only "Switches Super
Brand" testifies to the fact that it is still the most respected brand to be leading this business
vertical.

IMPORTANT MILESTONES

Started with the establishment of anchor India Pvt. Ltd in Mumbai in 1963 with the
manufacturing of Tumbler Switches. In 1971 Valsad factory was established with an aim to
manufacture the wiring device. In 1973 anchor gain fame among electrical manufacturing units
with introducing first piano switch under the brand PENTA in the electrical market.

Followed by the set-up of Valsad unit for fans in 1989 and ROMA MODULAR SWITCHES
in 1993. In 1994 anchor extended their hands with the set-up of DAMAN unit for wiring
devices and started manufacturing in candescent bulbs and fluorescent

Now in the last decade, it gained fame with the four major achievements including
▪ Starting manufacturing retardant wire in1999.

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▪ In 2007 MATSUSHITA electric works, JAPAN acquires 80% stake in Anchor adds T5
lighting portfolio
▪ In 2009 ANCHOR become a wholly owned subsidiary of MATSUSHITA electric works.
Receives super brand status and unveil a new CFL.
▪ In 2010 ANCHOR acquires globes lamps unveil its first major channel partner loyalty
program ZULU launches ROMA VIOLA switches.

YEARS OF STARTING PRODUCTS MANUFACTURE

1963- Tumbler switches.


1971- Commissioning of Valsad factory (Wiring Devices)
1973- First Piano switch unveiled under the brand Penta
1978- Initiates manufacturing of the Monoblock switches.
1984- Commissions Valsad Unit - ll and starts manufacturing switches from
Engineered Polymers
1989- Commissions Valsad Unit for fans.
1994- Commissions Daman unit for Wiring Devices Starts manufacturing incandescent Bulb
and Fluorescent Tubes
1999- Starts manufacturing Fire Retardant Wires
2007- Matsushita Electric Works, Japan acquires 80% stake in Anchor Adds T5 Lighting
portfolio
2009- Becomes a wholly owned subsidiary of Matsushita Electric Works. Receives Business
Super brand Status Unveils a new CFL
2010- Acquires Globus Lamps Unveils its first major channel partner loyalty program Zulu
Launches Roma Viola Switches
2011- Introduces Ave Sistema 44 Luxury range of switches and accessories from Ave Italy.
New Fan Factory at Dhamdachi. Unveils Panasonic Switchgear MCB, RCCB and Isolator.
2012- Commissions 1st Greenfield facility at Daman (Unit V) Acquires majority stake in
FirePro Systems Pvt Ltd Introduces Panasonic - Vision Switches Panasonic Vision receives
‘Good Design Award 2012’ by Japan Institute Of Design
2013- Launches Panasonic Ventilation Fans range. Introduces Residential Lighting range of
Panasonic Panasonic Vision Wiring Devices awarded IF Product Design Award in Germany.
Awarded ‘Masterbrand’ status
2014- Awarded Asia’s Most Promising Brand Unveils Uno Switchgear Starts selling Solar
Modules under Anchor & Panasonic Brands Unveils LED Lighting for Commercial, Retail and
Hospitality Sectors Panasonic HIT Solar PV Module wins Gold Award for Innovative Product
at Acetech Awarded Global HR Excellence awards for: outstanding Contribution to the cause
of Education and Innovative HR Practices by World HRD Congress
2015- Unveils Penta Modular Switches Awarded Global Excellence awards for: Outstanding
Contribution to the cause of Education and Diversity Impact by World HRD Congress Award
for Continuous Innovation in HR Strategy at work Initiates CSR Project at Jawahar and in
villages near Haridwar Starts offering EPC services for Solar Customers.
2016- Started 'Anchor Skill School' at Haridwar for Talent development in aspiring Youths by
Technical and Behavioural Practical trainings for Supporting Manufacturing sector with
Skilled & Developed Manpower. Commissioned State-of the Art Manufacturing Plant in
Haridwar for Wiring Devices & Switch Gear -(Unit -2).
2017- Launches new series of Roma Modular Switches under the flagship brand, and Roma
switches awarded with the coveted 'Good design Award' from Japan Institute of Design
Promotion.

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Q: 2) Draw the PESTEL Model along with SWOT analysis.
PESTEL Analysis is a useful tool for understanding the industry situation as a whole,
and is often used in conjunction with a SWOT analysis to assess the situation of an individual
business.
By understanding these external environments, organizations can maximize the opportunities
and minimize the threats to the organization.

[1] POLITICAL FACTORS


These refer to government policy such as the degree of intervention in the economy. What
goods and services does a government want to provide? To what extent does it believe in
subsidizing firms? What are its priorities in terms of business support? Political decisions can
impact on many vital areas for business such as the education of the workforce, the health of
the nation and the quality of the infrastructure of the economy such as the road and rail system.
For this industry will include.

[2] ECONOMICAL FACTORS


These factors will include taxes, interest rates, economic growth of the industry. The rapid
expansion of the different formats in Indian retail durable industry has eventually put the
consumers in perplexed state, so they do not able to differentiate between the profitable deals
offered by different organized and unorganized shops. Retailers want to play safe side. They
are not taking interest in investing their cash in the format which is not able to get enough foot
falls and a stream of revenues.

[3] SOCIO- CULTURAL FACTORS


Changes in social trends can impact on the demand for firm products and the availability and
willingness of individuals to work. In the UK, for example, the population has been ageing.
This has increased the costs for firms who are committed to pension payments for their
employees because their staff is living longer. It also means some firms such as Ads have
started to recruit older employees to tap into this growing labour pool.
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In the prevailing electrical industry the pool of skilled workers are difficult to be found. The
skilled labour is not available and no standard institutions are provided for the proper
incubation of the labour pool. And training is needed to be given for the proper guidance.

[4] TECHNOLOGICAL FACTORS

New technologies create new products and new processes. Modern and Sensor switches are all
new markets created by technological advances. Online shopping, bar coding and computer
aided design are all improvements to the way we do business as a result of better technology.
Technology can reduce costs, improve quality and lead to innovation. These developments can
benefit consumers as well as the organizations providing the products.

[5] ENVIRONMENTAL FACTORS


A sharp contraction in new orders maturing in the domestic power sector market due to
issues/bottle-necks related to non-availability/acquisition/ lack of enabling requirements such
as land, coal/fuel linkages, environmental clearances etc.
• Orders getting deferred or being put on hold. Weak investment sentiment, financing
constraints from the banks / financial institutions.
• Aggressive competition from new players / Joint Ventures formed in the private sector
in the Country for super-critical boilers and turbine generators affecting price
realisation and impacting margins.
• A surge in imports of electrical Products in recent years, mainly from China, resulting
• in loss of business to the domestic power equipment manufactures.
• Inflationary pressures and hardening of interest rates impacting cost / domestic demand
• and cost of capital.
• Lack of level playing field including infrastructure bottlenecks suffered by the domestic
• industry vis-a vis foreign suppliers / manufactures.

[6] LEGAL FACTORS


These are related to the legal environment in which firms operate. In recent years in the UK
there have been many significant legal changes that have affected firms&; behaviour. The
introduction of age discrimination and disability discrimination legislation, an increase in the
minimum wage and greater requirements for firms to recycle are examples of relatively recent
laws that affect organisation actions. Legal changes can affect a firm’s costs.

SWOT Analysis
A scan of the internal and external environment is an important part of the strategic
planning process. Environmental factors internal to the firm usually can be classified as
strengths (S) or weaknesses (W), and those external to the firm can be classified as
opportunities (O) or threats (T). Such an analysis of the strategic environment is referred to as
a SWOT analysis.
The SWOT analysis provides information that is helpful in matching the firm's resources and
capabilities to the competitive environment in which it operates. As such, it is instrumental in
strategy formulation and selection.
SWOT Analysis of Anchor:
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Strengths:
• Affordability for middle class and Highly Reputed Brand.
• At low price quality provides by company is high , and choice and convenience is high.
• Wide range of products in basket and good service offering.
• Very strong in local market with highest sales offices presence in market.
• Good branding and advertising by also roping in celebrity brand ambassadors.
Weaknesses:
• Not known globally and restricted to the Indian market only.
• Restricting Products from key markets.
• Low Spending on Marketing Activites.
• No different game plan according to divergent people, their lifestyles, their tastes and
budgets in India.
Opportunities:
• To Expand globally by tie-ups.
• Shifting their focus on providing B2B Solutions.
• To collaborate with big real estate companies company can expand business.
• Entering into high premium segment.
• Opportunities to expand into financial services catering to huge Segment.
• Increase Rural penetration.
Threats:
• Competitors global presence.
• Low cost Chinese entrants.
• Low priced brand perceived to be of low quality in Indian consumer minds.

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Q: 3) Explain Industry Dominant Economic traits.
Market size and growth rate:
Indian appliance and consumer electronics (ACE) market reached Rs 2.05 trillion (US$
31.48 billion) in 2017. It is expected to increase at a 9 per cent CAGR to reach Rs 3.15 trillion
(US$ 48.37 billion) in 2022. Electronics hardware production in the country reached Rs 3.88
trillion (US$ 60.13 billion) in FY18, growing at a CAGR of 26.7 per cent between FY14-18.
Demand for electronics hardware in India is expected to reach US$ 400 billion by FY24.

There is a lot of scope for growth from rural markets with consumption expected to
grow in these areas as penetration of brands increases. Overall consumer durable exports
reached US$ 0.78 billion in 2017. Consumer electronics exports from India reached US$
362.12 million in FY18 and US$ 267.15 million between Apr-Nov 2018. Also demand for
durables consumer electronic goods are likely to witness growing demand in the coming years
in the rural markets as the government plans to invest significantly in rural electrification. The
S&P BSE Consumer Durables Index has grown at 16 per cent CAGR between 2010-18. The
consumer durables sector in India is expected to grow 8.5 per cent in 2018-19. Consumer
durables index under the Index of Industrial Production (IIP) has grown 5.0 per cent year-on-
year between Apr-Nov 2018.

Number of rivals:

Production capacity:
Anchor Electricals, part of Japan's Panasonic Corp, is looking at over 2-fold jump in
revenues to become a Rs 5,000-crore company in the next five years through capacity ramp-
up. The company will pump in Rs 150 crore this fiscal as part of its investment plan of Rs 400
crore in three years towards capacity expansion and new product launches.
Currently, the company has four manufacturing units at Daman, Kutch, Haridwar and Roorkee
and offers over 3,000 products across various categories sold through 5,000 dealers and 4.5
lakh retail outlets in India.

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Vertical integration:
As previously mentioned Anchor has accomplished some enviable firsts in India. Some
of the recent innovations include The Uno Switchgear, RIKI-Power CFL (best buy in the CFL
category). Anchor endeavor’s to continue the cycle of innovation through its premium essential
low voltage switchgear under brand Panasonic with unveiling of RoHS compliant distribution
boards.
The company will also launch a massive assortment in premium LED lighting products as well
as value-for-money LED lighting products for commercial premises.
Product innovation:
Having dominated the electrical accessories market, Anchor continues to set
benchmarks with innovative and technologically superior products. From lighting solutions to
switch gears Anchor is a household brand. The company has been at the forefront of innovation
right from its inception and has a rich history in terms of established products and the ones
which are perhaps waiting to set standards.
Degree of product differentiation:
Anchor has breathed innovation right since its inception. It has accomplished some
enviable firsts in India. For e.g. it was the first organized player in the electrical switches
category. It introduced India to the first Piano switch that is still the benchmark of robust
switching operation. It was the first to introduce flame retardant wires in India. It was the first
to introduce the concept of Colour Plates through Roma. It was the first in the country to close
down profitable production of GLS lamps as part of environment conservation measures.

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Q: 4) What kind of competitive forces the Industry members are facing?
Porters five force analysis of electrical Equipment industry:
Porter's five forces analysis is a framework that attempts to analyse the level of
competition within an industry and business strategy development. It draws upon industrial
organization (IO) economics to derive five forces that determine the competitive intensity and
therefore attractiveness of an Industry.
Porter's five forces include – three forces from 'horizontal' competition: the threat of substitute
products or services, the threat of established rivals, and the threat of new entrants; and two
forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power
of customers

Competitive Rivalry:

• With a small number of firms in the high-end equipment market, competition is


moderate in the sector.
• Large players provide complete solutions and small and medium scaled companies
strive to struggle.
• Government plans to increase investment in power, and so the rivalry is expected to
increase.

Threat of new entrant:

• Threat of a new entrant is low, because of the capital intensive nature of the industry.
• As well as the presence of big players, blocks entry of new player is the reason behind
this.

Substitute products:

Threat from substitutes is low because of the following reasons

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• Other substitutes such as solar lights, Senor switches and Sensor equipment less
developed compared to electrical.
• Also the acceptance is less
• And so is the penetration power of the non-conventional ways is less as compared to
this.

Bargaining power of suppliers:

Bargaining power of suppliers is low due to the following reasons


• Suppliers (steel, aluminium) tend to have longer term contracts with the companies
and power of suppliers is low.
• Suppliers (steel, aluminium) tend to have longer term contracts with the companies.

Bargaining power of customer:

Bargaining power is medium due to following reasons:


• High price sensitivity, competition is more and wide range of products as well as
Chinese products are dominate the domestic market with less price so it lend higher
negotiating power in the hands of customers.

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Q: 5) What factors are driving the Industry to changes and what Impact
they have?
Electronics manufacturing is facing both challenges and opportunities in 2018. The
need to control costs continues to be a priority for manufacturers, while new technologies enter
the landscape providing revenue opportunities but requiring manufacturers to partner with
technology solutions providers.
The nature of electronics manufacturing trends in 2018 is such that every trend comes with
along with challenges. Electronics manufacturers will focus on finding ways to capitalize on
current trends while balancing the need to control costs, integrate technologies outside of their
primary areas of expertise, and meet customer demands for more efficient, eco-friendly
manufacturing processes and electronics. Here’s a look at some of the biggest trends shaping
electronics manufacturing in 2018 as well as the challenges each presents.
1. The demand for smart electronics devices continues to rise.
Smart devices are in demand. Devices like smartphones have been around for years,
but look for the same connectivity to become prominent in everything from vehicles to
microwaves in 2018. This trend will lead to the development of new partnerships as electronics
manufacturers seek technology partners to aid in building in and supporting the connectivity
required by smart devices.
2. Pressures mount for green electronics manufacturing.
“Being Green isn’t just for hippies and disaffected Xers any more. As climate change
statistics continue to mount, there’s increasing pressure from all areas – consumers, businesses,
and governments – to look into more eco-friendly manufacturing solutions. The various carbon
cap or carbon trading plans being implemented are also helping to drive this push
3. There’s a push for energy-efficient electronics, forcing manufacturers to develop new
methods to produce devices that consume less energy.
Environmental concerns are paramount not only during the manufacturing process, but
also throughout the lifespan of electronics devices. Reducing energy consumption is an
effective way to cut costs, leading both businesses and consumers to opt for energy-efficient
electronics. The pressure is on manufacturers to adopt green manufacturing processes while
simultaneously producing electronics that are less expensive to use thanks to lower energy
demands.
This trend is having a domino effect, contributing to increased demand for related technologies
such as global voltage supervisor ICs, according to a report by Technavio analyzing the market
for 2017-2024.
4. Strategic partnerships will help electronics manufacturers control costs.
As original equipment manufacturers (OEMs) increasingly outsource product design
and development to electronics manufacturing services (EMS) partners, they are able to reduce
overall costs as well as shift fixed costs to variable costs, a key benefit in the race to control
manufacturing costs.

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This trend spells opportunity for EMS partners, enabling them to expand into new lines of
business and revenue opportunities, and as a result, Many electronic manufacturing services
(EMS) companies are expanding into new services that offer high margin. They are providing
new services along the spectrum. At one end, they’re offering more design services, for either
sub-assemblies or finished products. At the other end, they’re offering more testing services.
The more services EMS providers offer, the more they move into new models of joint design
manufacturing (JDM) and outsourced design manufacturing (ODM).”
Venture Outsource outlines several key strategy considerations for EMS and OEMS, including
evaluating current customer and product portfolios, aligning strategy and business models, and
evaluating value propositions to ensure they’re in line with current needs and strategic business
decisions.
5. Electronics manufacturers will place more emphasis on logistics for rapid delivery.
From 2017, 50% of manufacturers will explore the viability of micro logistics networks
to enable the promise of accelerated delivery for select products and customers, “Manufacturers
will also continue to invest in logistics efficiency to keep up with competitors. This requires a
more efficient factory floor space and time to ensure that manufacturers can expedite the
delivery of their products.
These trends will be the key influencers that shape the electronics manufacturing industry in
2019 and beyond. It all comes down to better service and more sophisticated products,
delivered at unprecedented speed with accuracy – while at the same time, controlling costs and
minimizing environmental impact. It’s an evolving world, and electronics manufacturers that
position themselves as agile, flexible solutions providers that can keep pace with rapid change
and align themselves with the right strategic partners will be the ones to stand out in the coming
year.
Some Most Common Driving Forces:
• Internet & the new e-commerce opportunities and threats it breads in the industry.
• Increasing globalization
• Change in an industry long term growth rate
• Changes in who buy the product and how they use it.
• Technological changes.
• Marketing innovation.
• Changes in cost and efficiency.
• Growing buyer preferences for differentiated products.
• Reduction in uncertainty and business risk.
• Changing societal concerns ,attitude , and lifestyles.

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Q: 6) What are the Key Success factors of Anchor by Panasonic?
India is one of the fastest growing economies in the world and has an exceptional
market potential. India has undergone much more social and economic change in the last
generation than any other country.
Therefore, innovation holds the key to success here. India is a very diverse market and,
therefore, it is hard to categories the Indian buyer. Indian consumers are not only looking for
the availability of products, they also want better experience, services and ambience. To
succeed in this country, it becomes imperative for brands to innovate and make products
keeping in mind the needs of the local people.
Panasonic focuses heavily on 'localization' of products and technologies to suit the domestic
requirements. Earlier, most foreign companies, including Panasonic, developed products for
the US and European markets and later brought them to India. It no longer works that way.
Localization has been a key factor in Panasonic's growth in India. The localization strategy
focuses on conceptualizing and customizing products for the Indian consumers keeping local
needs and conditions in mind. We have also made crucial changes to the top management here
to drive growth from the country, build deeper inroads into emerging economies and swifter
decision making.
The company has invested about Rs 1,309 crore in its Jhajjar (Haryana) plant, which caters to
customer needs across categories. Panasonic producing air conditioners, washing machines and
welding systems at Panasonic Technopark, and plan to export the air conditioners and washing
machines to the Middle East and Africa soon. Panasonic acquired 80 per cent stake in Anchor
Electricals in April 2007 and the remaining 20 per cent in September 2009 for which Rs 2,400
crore was invested. For the joint venture company with Uno Minda, they have invested Rs 100
crore.
Even they are focused on providing smart solutions to create value for our customers. This
includes creating new categories in the B2B and B2C business. For B2C, we will continue to
create products that meet local needs. In B2B, we will expand solutions for businesses
following our corporate strategy. They are continue to pursue an autonomous management
system here under four broad categories, including product planning and development, quality
assurance, partnerships and alliances for business development and new business incubation.
And Some other Key success factors that makes Anchor:
TECHNOLOGY-RELATED KFS’s:
• Production process innovation capability
• Production innovation capability
• Expertise in a given technology
MANUFACTURING-RELATED KFS’s:
• Low-cost production efficiency
• Quality of manufacture (fewer defects, less need for repairs)
• Access to adequate supplies of skilled labour
• Low cost plant locations
• Flexibility to manufacture a range of models and sizes/take care of custom orders
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DISTRIBUTION-RELATED KFS’s:
• A strong network of wholesale distributors/dealers
• Gaining ample space on retailer shelves
• Having company-owned retail outlets
• Low distribution costs
• Fast delivery
MARKETING-RELATED KFS’s:
• A strong network of wholesale distributors/dealers
• Available, dependable service and technical assistance
• Breadth of product line and production selection
• Attractive styling/packaging
• Customer guarantees and warranties
SKILLS-RELATED KFS’s:
• Superior talent (important in professional services)
• Quality control know-how
• Ability to get newly developed products out of the R&D phase and into the market very
quickly
OTHER TYPES OF KFS’s:
• Favourable image/reputation with buyers
• Overall low cost
• Convenient locations

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Bibliography
• https://anchor-world.com/history
• https://www.ibef.org/industry/indian-electrical-machinery-industry-
analysispresentation
• https://www.panasonic.com/in/corporate.html#brand
• http://www.yourarticlelibrary.com/industries/heavy-and-light-electrical-
equipmentindustry-in-india/19663
• http://www.wirecable.in/2012/01/issues-facing-the-indian-power-and-td-sector/
• https://www.thehindubusinessline.com/companies/anchor-electricals-unveils-led-
range/article7757659.ece
• https://www.ibef.org/industry/consumer-durables-presentation
• https://www.eletimes.com/indian-electrical-equipment-industry-records-highest-
growth-of-12-8-in-seven-years

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