LED presents
Gangs Of Lighting
Red ocean Competitive strategies Industry overview From Crompton Greaves Consumer Electricals (Lighting) point of view. By Arjak Mitra Reg. ID - 89933
Industry Profile: As India represents one of the biggest lighting markets,
Overall Lighting Industry comes Under RED OCEAN Strategy
As per market research and Elcoma,: The LED lighting market in India is expected to reach to INR 220 billion by the year 2020. If we talk in term of contribution, then 30 % is from commercial segment, 20 % from residential, 30 % from street lighting and 20 per cent from industrial lighting.
Industry Demographics
Industry timeline : • • • •
Tungsten Bulb era till 2005 (Monopolism) COMPETETION is tough as it have a high entry barrier in earlier days. Required factories (not many suppliers) • •
• 1. 2.
• • •
Fluro cent Bulb (CFL) era till 2005 - 2015 Similar state and dominated by few companies,
•
LED Bulb era till 2015 – Present COMPETETION become Higher technology changed and suppliers increased hence lot of regional and small player emerged. Hence Buyers bargain power increased because the difference of switching to substitute is less and offering is similar mostly.
Red ocean – Every company want to beat the competition Everyone want to exploit existing demand i.e. Syska want to eat Philips demand and Philips want to eat Crompton's demand Every one want to eat each other's pie
Government regulation and exposures: Unnat Jyoti by Affordable LED for All (UJALA) program. Under UJALA scheme, LED bulbs, LED Tube lights are being provide to domestic consumers. Till date, over 36.46 crore LED bulbs, 72.01 lakh LED Tube lights distributed by EESL across India. This has resulted in reduction of 39 million t CO2 per year and estimated annual monetary savings of INR 19,100 crore in consumer electricity bills.
Industry Benefits: • •
•
Form 2015 LED revolution in India began in its full pace Huge tender in both consumer lighting products such as Bulb and tube lights as well as Commercial such as streetlights and floodlights hence revenue boosts. Consumers are also becoming well aware
External environment Ecological Light Pollution affect Fauna (e.g. tortoise) Energy efficiency Day light factor
Political
Economic
EESL - Energy Efficiency Services Limited UJALA - Unnat Jyoti by Affordable LED for All Tenders
Price erosion. impacted by the economic slowdown and witnessed delays in execution of Government and institutional orders.
Legal
Sociocultural
BEE - Bureau of Energy Efficiency BIS - Bureau of Indian Standards IP - Ingress protection
Most of the companies share similar portfolio Diverse country – Diverse Needs Different architecture
Technological Constant tech changes in electronics hence product get obsolete quickly
Blue ocean moments : 1. 2. 3. 4.
To create uncontacted market space for our self (Updating portfolio with new design and features) Big company eat smaller company if they into their portfolio – Wipro Lighting Bought Clean ray (Horizontal Integration) and a Chinese company (lateral but new geographic)e.g. of Acquisition, merger, Resulting Utilization of resources, low risk, better product and efficiency. To create new segment – Sensor lighting, Anti mosquito repellent bulb Create and capture new demand
Note : Only way remain strong is to develop intellectual property, patent (Antibac is blue ocean strategy) Still there is no substitute for the product in the market because of Patent. doing it.
introduce Battery backup Copied by competitors. As the technology is common and have multiple ways of
• • • •
New trend develops new market opportunity New portfolio introduction. Go beyond standard offering T – Bulb and related products was a design Disruption
• •
Lifestyle and statement (Smart or IOT base bulbs) Dual strategy persuasion by all red ocean players (Trying to achieve cost leadership and Differentiation both) Particularly in commodity sector as LED bulbs can be considered as a commodity only.
Company Profile:
Crompton Greaves Consumer Electricals Ltd is one of the leading consumer companies in India with a 75+ years old brand legacy . Products : Fans Lighting Home Appliances Pumps
Five-Dimensional Growth Strategy: Vision
Manufacturing Locations : • • • •
Goa Vadodara Ahmednagar Baddi
Brand Excellence
Operational Excellence
Portfolio Excellence
Organisational Excellence
Go to Market Excellence
Crompton Lighting: B2C & B2B •LED Bulbs •Luminaires •Lamps •Streetlight •Flood light etc. Crompton lighting : Challenges & Five forces model
With a greater number of companies – local as well as international suppliers increased. With new technology supplies with specialized skill set such as IOT with have greater power as there are more companies than suppliers.
With similar price and almost same every company offer minute or radical changes in terms of feature
Increase, because of more companies sharing similar portfolio. They get better deals. Philips sales smart bulb set in Rs 10000 Whereas Wipro or Syska sales in half price
Company innovative journey, strategy and learning :
Incandescent era
1986 / 87
1995
First in class Goniometer: Worli, Mumbai Value adding by ensuring quality. India’s first goniometer was installed to test Luminaires performance. Market share PHILIPS (Market leader), Surya, Bajaj, Crompton Crompton Image – Pump, Motor, Fan, Switch (Monopoly)(South strong)
2006 T5 thin tube light First in class, followed by Philips
1999
Reflector Technology, HID Mouth blown lamp – First in market
Double asymmetric Reflector Technology, HID Flood light, For petrol pumps (Unique use case and technology)
2004/05
2003/05
Twin light in single channel T12 First in class
First LED Bulb Introduction
Fluro cent era
LED Era
First in class Edge Lit Panel introduced affordable edge lit panel, ( But did not succeeded as Competition was selling low cost panel (back lit panel) at economical price and we were selling premium (edge lit) panel at higher price). Crompton is still trying to balance quality WRT market prises.
Mushroom Batten was and still a smashing hit among customers. Design and technology disruption
SWOT:
Renowned and established brand Market leadership in key product categories High-quality management team
Robust distribution network in Tier I and tier II cities
Mildly unique but Limited product portfolio Limited presence beyond tier II cities Perceived as a fans brand
Housing for All by 2020”should create robust demand for the company’s product portfolio
Competitive intensity from the unorganized as well as organized players continues to remain high
Huge untapped opportunities in the LED segment led by the government’s initiative to replace 770m GLS and CFL bulbs
Weak macroeconomic outlook could weaken demand for the company’s key products
Case study, Marketing strategies, Learning : Case 1 Philips Bangladesh ad Viral video of GLS lamp by Philips for Bangladesh with slogan – “Macher raja elish, Bati er raja Philips” ( King of fish is Hilsa, King of bulb is Philips )
This ad become so famous that they published it in Kolkata and DD Bangla India Hence Philips doubled their market share in Bangladesh and West Bengal. Hence dominated the segment very well even though it was price sensitive segment. How difference in market communication made Philips a market leader. Philips well understood market and audience psychology Case 2 Syska (Shree Sant Kripa Appliances Pvt. Ltd,)
Syska became the synonym of LED (Hammer based advertisement) they associated themselves to LED so much that whenever you think LED you think Syska, so with in a time of 5 years they have captured the mind of customers. (Even the news anchors have the brand on their laptops). Syska tried to create their own space in the red ocean space.
Syska was not an innovative brand like Crompton, Philips and Wipro etc. But still providing vanilla products they did managed to bring their brand name. They are aggressively sponsoring prime time shows & are showing their presence in big events.
Where as Philips which commanded the conventional lighting space have dropped.. Which Syska have taken a lot of space from Philips. ( Syska captured heavily on western region of the market) Syska tried to educate the consumer about the benefits of LED and eventually turned themselves as the messiah of this new LED technology in consumers mind. So market leaders need to advertise themselves properly whenever the technology of their saleing product is changing.
Case 3 Innovation vs Psychology and product placement. (Commodity level innovation) Lyor didn’t performed the Crompton as expected in the market, priced 30% over the normal LED Bulbs. It had 20% more lumen but the audience took low-cost bulbs because when Lyor was launched, the led bulbs already became a commodity.
Success of Mushroom Batten, Because of the affordable manufacturing process and smart designing. Resulting Good optical spread of the light and low delta in price comparison in the market. Consumers were willing to go for a value for money proposition. Hence the product is a hit.
Conclusion : The company continues to drive innovation in the consumer lighting business by launching differentiated products with valueadded benefits Cost optimization efforts have allowed the company to offer competitive product range to consumers across product segments. The company also bagged the prestigious smart city projects during the year. 9 W bulb awarded as best energy efficient appliances. New Launches The company based on a consumer-led value proposition, has introduced ‘Back up Lamp’ which works even after a power failure.
Anti-Bac bulb that kills 85% bacteria have garnered positive feedback and image for the company.
2015 Crompton Advent Acquisition : US private equity firm, Advent International and Singapore’s Temasek Holdings are set to sell up to $185 million (Rs 1,328 cr ore) worth of shares in Crompton Greaves Consumer Electricals as the global investors are taking advantage of a stock market rally and making a near three-times return on a four-year-old investment.
Well The present (2019 – 20) share of Crompton is different when it stands at 3rd position, Syska 2nd and Philips 1st.
Crompton Lighting Market share 2018 /19
CROMPTON (currently number 3 in the lighting segment) intends to focus on the LED segment by providing better technology and innovative products in the market. Note : Scope of Improvement 1. Need it innovate on marketing strategy and communication. 2. Need to understand diversified consumer need for unification of existing portfolio. 3. Can introduce separate brand of smart and customizable services and product. 4. Need to enrich the portfolio. Thank You