Case study presentation on Amara Raja Batteries Ltd.

INTRODUCTION

• Amara Raja batteries Limited (ARBL) was started in 1985 by Mr Ramachandra Galla.

• The first company to manufacturer sealed maintenance-free valve-regulated lead acid (VRLA) batteries for industrial applications in India.

• The largest manufacturer of VRLA batteries in the Indian Ocean Rim and among the top 10 in the world.

• Technical collaboration with Johnson controls , a global automotive component manufacturer.

Battery statistics

• The global battery market is about US $86 billion , of which roughly US $50 billion is allocated to rechargeable batteries.

• The growth is estimated at 6% annually through 2014.

• China , India , Brazil and South Korea will record some of the strongest market gains.

Indian Automobile Battery

• The Indian automobile battery industry is about Rs.20,000 Cr(Organized Sector- 12,000 Cr) and Industrial battery industry (telecom , railways , power & ups) is Rs.8000 cr

• The automobile battery market is divided into the OEM market and Replacement market.

• The OEM market (30%) is catered to by established companies like Exide , Amara Raja( Amaron , Quanta) , AMCO.

• The Replacement market (70%) is shared equally by the unorganized and organized players , each having 50% of the market.

History of ARBL

• The ARBL is an Indian battery manufacuringco. which is headquartered at Hitec city , Hyderabad.

• It is better known its for automotive battery brand ‘Amaron’ which is the second largest selling automotive battery brand in India.

• ARBL employs a workforce of over 7000 employees.

ARBL at a Glance

• Type – conglomerate

• Founded – 20th Dec ,1985

• Founder – Ramachandra Naidu Galla

• Area served – worldwide

• Website – AmaraRaja.co.in

• Mission :

the mission of ARBL is to deliver reliable and clean power to its customers , technology and trust are key value additions that are delivered with every product and endorsed by its satisfied clients across the globe.

• Vision :

will be a dominant player in providing integrated solutions in conversion and management of electrical power by leveraging sustainable technologies.

ARBL has two strategic business units (SBUs):1. The Industrial batteries division and2. The Automotive batteries division

Business of the co.

• Industrial– Under this it manufactures and market five products namely Powerstack , Amaron Quanta, Amaron Volt, Amaron Sleek and Applications. Its clients includes big names like BSNL, MTNL, Lucent, Alcatel, Siemens, Nokia, Ericsson, Alstom, Crompton Greaves, etc.

• Automotive– It manufactures and market automotive batteries under the name Amaron. Under Amaron it has introduced products like Pro, Flo, Go, Black, Fresh, Hi–way, Harvest, Shield, and Optima caters to various automobile needs.

• The company exports automotive batteries to countries namely Singapore, Malaysia, Hong Kong, Thailand, Vietnam, Philippines, China, Japan, Greece, Australia, Dubai, Omen, Bahrain, UAE, Kenya, Tanzania, South Africa and many more.

• The company has been supplier to big companies like Ashok Leyland, Fiat, General Motors, Hindustan Motors, Honda, Hyundai, Mahindra & Mahindra, Maruti and Tata Motors, Daimler Chrysler and Ford.

SWOT Analysis

• Strengths : contains patented silverx alloy to give it extra-long life. High customer focus in all aspects from design to

manufacturing to sales. Continuously innovating and is at par with the best

batteries in the world. Market leader in India with in a short span of a few years. Huge dealer network. Online ordering of batteries. Excellent advertising and marketing through ads , print

media.

• Weakness :

Higher cost means limited margins

Huge competition from local and international brands means limited market share growth

• Opportunities :

Boom in automobile sales in all segments

Customers are getting more brand sensitive and focus on quality more than cost.

international markets responding well to inroads by Amaron.

• Threats :

Other battery manufacturers offering lower prices.

Improvement in car technologies can lead to modification of batteries

Unfavourable govt. policies can affect operational efficiency.

Product differentiation

• Form :- Black casing made of strong propylene material.

Convenient fold-down handles

Fancy looking wends

Ribbed side-walls

• Features :- Charge indicator

Non-corrosive plates

Heat resistant technology

No water topping required

Service differentiation

100 franchisees spread across country , named pit stops

Standard store design

Distribution through 7,250 retailers

Planning to distribute through departmental stores

Promotional strategies

• The co. highlighted its products by the tagline “Lasts Long , really long.”

• Advertising campaign entrusted with O&M.

• Hinglish lyrics makes the brand youthful & sporty.

• For brand recalling among customers the co. stared mineral water campaign and distributed water bottles with unique messages.

• The co. associate itself with events like motorsports and Go-karting.

• The co. signed Narain Karthikeyan who is the 1st

formula one driver from India.

Sales and Distribution strategy

• Its 100 franchisees spread across the country are named Pit stops.

• The co. also distributes batteries through other channels.

• At present the company is distributing products to about 7,250 retailers who include service stations , accessory shops , old battery dealers , lubricant dealers etc.

Why did Amara Raja focus on the replacement market ?

• Top competition from Exide in OEM

• Better price realisation

• After making a name in replacement market it can enter into OEM market

• Unorganized nature of the market

In what way does branding help Amara Raja to market a low involvement product like

automotive batteries?

• After making a name in replacement market it can enter into OEM market by grabbing the attention of big companies

• Effective positioning – easy to recall brand

What should ARBL do to penetrate OEM segment to increase market share?

• Product customization

• Meeting requirements of OEM in Cost effective manner

Conclusion

• Amara Raja believes in influencing andimproving the quality of life by building institutionsthat provide better access to better opportunities ,goods and services to people all the time . Withinnovative engineering , research and design ,Amara Raja has grown with partnerships andinformation sharing with world leaders.

• Amara Raja is committed towards latestgeneration technologies by developing andmanufacturing globally competitive , customerfocused products of world class quality andresponsibly introducing these products intorelevant markets.