Videocon: Rise From The Ashes: Presented By: Group 9
Videocon: Rise From The Ashes: Presented By: Group 9
Videocon: Rise From The Ashes: Presented By: Group 9
ashes
Presented by: Group 9
Vision and Mission
• Its growth in the 1990s, when it added more products such as air conditioners, refrigerators, and
home entertainment systems, was synonymous with India’s liberalisation of its economy.
• Consumers always tended to buy it for its price discount, rather than perhaps for it being
an attractive brand.
• Constant changes in positioning did not help. The brand went through a slew of changes
in the early years from “Bring home the leader” to “New improved life” to “Eco logic for
sustainable life” but none of them had a ring of a winner.
• Price warrior has a limited life because he will sacrifice long-term brand values for short-
term sales.
• By constantly pricing themselves 10-20% lower than the competition with the use of
cheap technology, they managed to hold double-digit market share in most of their
categories and were a constant threat to other international brands
• If they were careful about nine years ago they might have averted the bad situation they are in today. If
one looks at a piece of Videocon history from 2009-2014, you can tell that the company was headed for
an inevitable disaster.
• Videocon started off well with its large portfolio of brands like Sansui, Kelvinator, Electrolux Kenstar, in
addition to the marketing of Akai and Philips Televisions. But the Korean and Japanese brands quickly
overtook Videocon and made it no 4 in the market. This was largely due to Videocon’s emphasis on
price rather than quality and brand image.
Videocon Telecom
• In 2017 Videocon Telecom decided to venture into new
businesses, including retailing of CCTV cameras, smartphone
accessories, smart homes and city solutions and mobile VAS.
• As India opened up its economy, it diversified into oil and gas in 1994 by signing a production sharing
contract for the RAVVA oil and gas field off Andhra Pradesh along India’s east coast. Dhoot later
acquired interests in oilfields in countries like Oman, Indonesia and Brazil, Mozambique and East
Timor, running overseas operations through a Cayman Islands subsidiary, Videocon Hydrocarbon
Holdings Ltd.
• What compounded the group’s woes was the end of the last oil boom. Videocon had acquired oil
interests globally as Brent crude prices kept surging for more than a decade, barring a blip after the
collapse of investment bank Lehman’s Brothers in 2008. The rally fizzled three years ago as demand
fell and output remained high. Since its last peak in 2014, Brent has declined by more than half to trade
at $48.
• Some 85% of its revenue comes from its consumer electronics business. In 2016, this
segment saw a 15% drop in income.. Mounting input costs are squeezing margins
even though demand is growing. The industry has also seen a shift from off-line to
online shopping.
• Meanwhile, Videocon’s crude oil and natural gas venture saw revenues dip by
39% mostly due to a glut in global oil prices
• It’s no longer viable to start producing crude at lower prices. At the end of December 2015,
Videocon’s energy unit had a debt worth Rs 19,073 crore. According to Dhoot, the segment’s debt is
equivalent to Rs 22,000-crore investments
• Revenues from the oil and gas business also dropped due to fall in global crude oil prices during
2015 to 2016.
.
• Videocon’s debt rose six-fold since its telecom foray in 2008 to over Rs 45,000 crore till December 2014,
according to a Credit Suisse report. The company sold its 10 percent interest in the Mozambique gas
project to Oil and Natural Gas Corporation Ltd. in 2013 for $2.4 billion to pare the burden. It also sold
majority stake in its direct-to-home business to Dish TV last November in a merger that will create one of
India's largest pay TV services provider. Still, the debt burden has fallen only marginally.
SWOT Analysis
Strengths Weakness
Opportunities Threats
PENETRATION DEVELOPMENT
STRATEGY STRATEGY •Acquired Thomson SA in 2005
MARKETS
DEVELOPMENT
STRATEGY
STRATEGY •Oil and Gas business
•Insurance
•E-commerce
•Handsets
•DTH services
BCG Matrix
RELATIVE MARKET SHARE
High Low
STARS QUESTION Consumer Durables
MARKS
MARKET GROWTH RATE
High
Telecommunication sector
E
•High investment in consumer
P
tubes durables
• Resolution by •Emergence of organizes retail
government to Reduce market leading to low prices and
carbon footprints increased variety
•Emergence of E-commerce
websites
S T
Technological
Social Factors
Factors
•Changing consumer
needs and preferences •Improved electricity
•Rural vs urban markets consumption
•Shift towards foreign •High quality products
brands •Changing technology