CROMPTON GREAVES- SWOT ANALYSIS (Weighted and Ranked)

1. SWOT Matrix –Crompton Greaves
Helpful
to achieving the objective
Harmful
to achieving the objective
(attributes of the system)Internal origin
Strengths
· Wide product range to provide end to
end solutions to customers across
various segments (0.06)
· Major presence in domestic power
market and wide installed
equipment/customer base (0.4)
· Prompt after sales service, Good
understanding of markets conditions and
Geographically wide spread(0.3)
· Significant technology absorption and
adoption to suit local needs(0.15)
· Contemporary integrated manufacture
base and infrastructure(0.2)
· Highly committed engineering, technical
and managerial power(0.14)
Weaknesses
· Limited financing capacity for large
projects(0.18)
· High working capital requirements(0.6)
· Operational Constraints(Flexibility, Speed
of response) vis-a vis Competitors(0.22)
(attributes of the environment)External origin
Opportunities
· High growth rate will stimulate growth in
demand for infrastructure (0.12)
· Boost to power transmission sector and
privatization moves in distribution
sector(0.04)
· Total transmission capacity to be
increased(0.1)
· Reduction of costs(0.42)
Threats
· Delay/ Deferment of projects(0.4)
· Technology leaders unwilling to share
technology(0.08)
· International players consolidating and
setting up of local manufacturing
bases(0.1)
· Increasing competition from large
companies with strong financial
muscle(0.42)
· Lowering of import tariffs(0.18)
Prioritization
We evaluated Strengths and weaknesses on 3 categories:
· Importance. Importance shows how important strength or a weakness is for the organization in
its industry as some strength (weaknesses) might be more important than others. A number from
0.01 (not important) to 1.0 (very important) is assigned to each strength and weakness. The sum
of all weights equals 1.0 (including strengths and weaknesses).
· Rating. A score from 1 to 3 is given to each factor to indicate whether it is a major (3) or minor (1)
strength for the company. The same rating is assigned to the weaknesses where 1 would mean a
minor weakness and 3 a major weakness.
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2. · Score. Score is a result of importance multiplied by rating allowing prioritizing the strengths and
weaknesses.
Opportunities and threats are prioritized slightly differently than strengths and weaknesses. Their
evaluation includes:
· Importance. It shows to what extent the external factor might impact the business. The numbers
from 0.01 (no impact) to 1.0 (very high impact) are assigned to each item. The sum of all weights
equals 1.0 (including opportunities and threats).
· Probability. Probability of occurrence is showing how likely the opportunity or threat will have any
impact on business. It is rated from 1 (low probability) to 3 (high probability).
· Score. Importance multiplied by probability will give a score by which we prioritized opportunities
and threats.
SWOT Analysis Prioritization Table
SWOT analysis of Crompton
Greaves Limited Importance Rating Score Reason for Rating Reason for Importance
Strengths
Wide product range to provide
end to end solutions to
customers across various
segments 0.03 2 0.06
Some of the competitors
do not offer such wide
range of offerings giving it
a competitive edge
Client loyalty to brand will
develop with time
Major presence in domestic
power market and wide
installed equipment/customer
base 0.2 2 0.4
It has 30 percent market
share giving it a decent
customer base
Most important as it gives
them an edge to leverage
upon at the present market.
Prompt after sales service,
Good understanding of
markets conditions and
Geographically wide spread 0.15 2 0.3
It has 19 outlets in India
divided in north, west ,
south and east regions.
This sets base for decent
after sales services
Highly important as this
leads to customer
satisfaction and customer
retention.
Significant technology
absorption and adoption to suit
local needs 0.05 3 0.15
R&D spending of 400
million and has received
rewards for research
several times by
prestigious organizations
This might be overshadowed
by limited financing capacity
Contemporary integrated
manufacture base and
infrastructure 0.1 2 0.2
over 30 manufacturing
bases in India
Important as this will help in
building new products and
improvising on existing
services
Highly committed engineering,
technical and managerial
power 0.07 2 0.14
A dedicated workforce of
81500 employees supports
the organizations
Highly committed engineers
may be able to cover up for
technology and
development constraints
and limited financing
Weaknesses
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3. Limited financing capacity
for large projects 0.09 2 0.18
Lack of capital for
undertaking new projects
will affect business
development adversely
Cash and bank balances in
hand is 442 crore which is
very less compared to
market leader (BHEL) whose
is 11872 crore. It will give a
large competition
Operational
Constraints(Flexibility, Speed
of response) vis-a vis
Competitors 0.11 2 0.22
Operational efficiency is of
paramount importance
not only because it adds
value to the customer but
also for the financial
benefits it yield.
Operational constraints
leading to company's under
performance in international
business.In 2012-
2013recorded loss of $10
million
High working capitals
Requirements 0.2 3 0.6
Lack of capital will affect
growth and the company
has large amount in sundry
debtors in recent year's
balance sheets.
Inadequate recovery from
traditional customers results
in high working capital
requirements which in turn
affects profitability.
Importance
Proba
bility Score
Opportunities
High growth rate will stimulate
growth in demand for
infrastructure 0.06 2 0.12
The compound growth
rate for infrastructure in
India for FY 12-17 is 17.6%.
Based on the past trends
private sector is expected
to invest 25% of this share.
Strengths such as presence
across various segments and
managerial expertise makes
this opportunity dominant
and realizable
Boost to power transmission
sector and privatization moves
in distribution sector 0.04 1 0.04
Present investment rate in
generation to distribution
and power sector is 1:0.5
against the desirable 1:1.
This ratio has been
gradually improving over
the years. Also pitching for
privatization in the
distribution sector by the
Government increases
feasibility of this prospect
Significant competition from
international companies,
especially Chinese
companies, offering faster
delivery schedules and lower
costs. The prices of Chinese
players are 50 per cent
lower than that of domestic
manufacturers
Total transmission capacity to
be increased 0.1 1 0.1
A total of 109,440 circuit
km of transmission lines
have been planned to be
added along with 270,000
MVA of substation
capacity in the 12th Five
Year Plan
This opportunity though
supported by CG’s adoption
to suit local needs could be
held back by certain factors
such as limited financing
capabilities to grab huge
projects. High working
capital requirements could
also prevent huge
investments.
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4. Reduction of costs 0.14 3 0.42
To secure cheaper power
through large size power
projects, the government
launched ultra-mega
power projects. This will
add an additional capacity
of 10,000 MW
This project planned under
11th Five Year Plan is yet
to be fully implemented
and also the limited
success of previous
projects might affect the
future of this plan.
Threats
Delay/ Deferment of projects 0.2 2 0.4
Delay of projects leads
to a hit in customer
satisfaction and
hampers the reputation
of the company in the
existing market.
The company is seeing a
delay in new orders in the
domestic market due to a
slowdown in project
finalization by customers.
Technology leaders unwilling
to share technology 0.04 2 0.08
Development of new low
cost technology by
competitor still remains a
threat.
Crompton greaves itself
has good technology base
and hence has strong
potential to adapt to
change in technology.
International players
consolidating and setting up of
local manufacturing bases 0.1 1 0.1
There are number of
foreign players already
competing with
Crompton Greaves and
India having relaxed
norms for foreign
investment creates way
for more companies to
enter in this sector.
There are number of big
foreign players such as
ABB, Schneider etc.
already in the market.
Despite the competition,
Crompton Greaves
manages to maintain its
market share.
Increasing competition from
large companies with strong
financial muscle 0.14 3 0.42
Large players with
strong financial muscle
can create a strong
manufacturing base and
can give strong
competition to existing
players.
Due to relaxation in FDI
and increased foreign
investments in India in
power sector there is a
risk of new companies to
enter into the Indian
Market thereby increasing
competition.
Lowering of import tariffs 0.18 1 0.18
Lowering of import tariffs
provides an edge to
foreign markets as
foreign players can sell
their goods at cheaper
cost.
Chinese market creates a
big threat to this sector as
they hold potential to
manufacture goods at a
lower cost.
Submission By:
Group 4
Section B
Harshan Hashim (PGP05068)
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5. Henna Bansal (PGP05069)
Ilika Grover (PGP05070)
Jayesh Nagpal (PGP05071)
Joel Daniel (PGP05072)
5

6. Henna Bansal (PGP05069)
Ilika Grover (PGP05070)
Jayesh Nagpal (PGP05071)
Joel Daniel (PGP05072)
5