National Aluminium Company Limited, India
PROJECT REPORT ON
MARKETING STRATEGY OF NALCO Prepared by:
PITABASH BEHERA Roll No.1410MBA13
Under the guidance of
Mr. J.P DASH Assistant General Manager (Marketing) Corporate office NALCO, Bhubaneswar-751061
P.G DEPARTMENT OF BUSINESS ADMINISTARATION SAMBALPUR UNIVERSITY, JYOTI VIHAR, BURLA, 768019, ORISSA Visit us at:
[email protected]
17th June 2011
DECLARATION ‘
I declare that this project report entitled “MARKETING STRATEGY OF NALCO” prepared
by me is a confide record of work done at NALCO Bhawan, Bhubaneswar Corporate Office located at Nayapalli,under the guidance and supervision of, Mr. J.P Dash, Assistant General Manager (Marketing), Corporate office,NALCO,Bhubaneswar-751061
Pitabash Behera SAMBALPUR UNIVERSITY
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JYOTI VIHAR, BURLA,
ACKNOWLEDGEMENT I am thankful to NALCO for giving me an opportunity to conduct research work in their esteemed organization. I am honored to take this opportunity to sincerely thank Mr. P.K.Parida, ED (Marketing), NALCO, Bhubaneswar, who allowed me to work under Mr.J.P DASH, Assistant General Manager (Marketing), NALCO, Bhubaneswar, for expressing his faith & confidence in me by assigning this project work to me.
I wish to express my sincere gratitude to Mr. Mr.J.P DASH, Assistant General Manager
(Marketing), NALCO, Bhubaneswar,for giving this opportunity to have an enriching learning experience in this company and also for his keen interest,guidance,continious encouragement,support and help throughout the period of the project.
I also wish to extend my gratitude to Ms.Sumita Sahaya, Mr.S.L Bose ,Mr.J. R Kapoor & all other members of NALCO, Bhubaneswar, for providing me the necessary information and relevant data. Lastly I thank all the respondents whose responses played a major role in completion of this research work and without whose help I couldn’t have completed the project work.
Pitabash Behera SAMBALPUR UNIVERSITY
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JYOTI VIHAR, BURLA,
CERTIFICATE This is to certify that the Summer Training Project entitled “Marketing strategy of NALCO” by Mr.Pitabash Behera, a student of Master of Business Administration at SAMBALPUR UNIVERSITY,JYOTI VIHAR,BURLA,768019,ORISSA,has been completed under my guidance and supervision.
Mr. J.P DASH Assistant General Manager (Marketing) Corporate Guide, NALCO, Bhubaneswar-751061
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17th June 2011
CONTENTS SLNO
TITLE
Page no
1 2 3
EXECUTIVE SUMMARY INTRODUCTION PROFILE OF ALUMINIUM
7-7 8-9 10-27
4 5 6 7
PROFILE OF NALCO REVIEW OF LITERATURE ANALYSIS AND FINDINGS DOMESTIC PROCEDURE
28-37 38-51 52-56 57-61
8 9
TERM & CONDITIONS PRICING PROCEDURE
62-66 67-67
10
DISTRIBUTION PROCEDURE
68-68
11
EXPORT PROCEDURE
69-71
12
CUSTOMER SATISFACTION
72-76
13
PROMOTIONAL PROCEDURE
77-78
14
SUGGESTIONS
78-78
15 16
CONCLUSION BIBLOGRAPHY
79-79 80-80
LIST FO TABLE
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Table no 1 2 3
TITLE
Aluminium Applications Ranking TOP 10 Countries In World With Respect To Aluminium Production Production Of Alumina In India.(Unit In Tones)
4 5 6
Ranking TOP 10 companies In World With Respect To Aluminium Production Nalco Capacity Region Wise Sales Structure Of Aluminium
7 8 9 10 11 12
Dominant Players Of Aluminium Industry Aluminium Ore Capacity Of Top 10 Countries (In Million Tones) Global Trend Of Aluminium Usage (Consumption): Aluminium Usage Of Western World And India(%) Country Wise Usage Of Aluminium In Different Sector Usage Of Aluminium In India
LIST OF FIGURES SLNO
TITLE
1
Bohr Diagram
2
Aluminium Production
3
Entire Bayer Process
4
Alumina-Bauxite Refining
5
Aluminium Sustainability
6
The Marketing Mix
7
BCG Growth-Share Matrix
8
. SWOT Profile
9
. 7s Model
10
BCG Growth-Share Matrix Of Nalco
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Executive Summary Aluminum represents the second largest metals market in the world. Growing demand for the lightweight metal is fuelled largely by the booming Chinese economy which already consumes a quarter of the world’s aluminium production. Analysts predict an annual growth rate of 8 to 16% in the Chinese automotive industry up to 2010, a 15% increase in construction expenditure in 2011 and a minimum of plus 16 million annual growths in urban population during the next
8 years. According to analysts these factors will combine to see China consume 36% of world’s aluminium production as early as 2010. Aluminium Industries in India is one of the leading industries in the Indian economy. The growth of the aluminum Metal industry in India would be sustained by the diversification and exploration of new horizons for the industry. India has huge deposits of natural resources in form of minerals like copper, chromites , iron ore, manganese, bauxite, gold, etc. The India aluminum industry falls under the category of non iron based which include the production of copper, tin, brass, lead, zinc, aluminum, and manganese. The main operations of the of the India aluminum industry is mining of ores, refining of the ore, casting, alloying, sheet, and rolling into foils. At present, Hindalco and Nalco are one of the most economical in the production of aluminum in the world. For the sustenance of the growth the aluminum industry in India has to develop research and development units to assist the production and improve on the quality measures to keep a stringent quality control.
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Marketing strategy is one of the important parts of company’s development. The objective of this study was to help NALCO to know it’s own position in comparison to it’s competitors; to know whether the strategy used by the company is effective; and to provide a proactive, planed & informed approach to it’s own strategies in order to gain an upper hand. The study on Marketing strategy is done by taking all aspects of strategy very keenly like SWOT, BCG , 7S MODEL , 4P’s. and others procedures.
1.0 Introduction In the present competitive world every company wants to be the best in their segment of business. So, company identifies its competitors with whom it has to compete and according to it the company makes its strategy to survive in the market. If the company cannot compete in the market then it will become a dog in the market. Now-a-days each and every company is too aggressive to follow or lead the market. Therefore, it has become imperative to study the Marketing strategy of the company and renew it time and again. Coming to the aluminium industry, this is one of the leading industries in the Indian economy. The growth of the aluminum Metal industry in India would be sustained by the diversification and exploration of new horizons for the industry. So the proper use of marketing strategy is very much important and that to in a planed way. Keeping these facts in view this study was conducted to know the growth of NALCO as well as to find opportunities for expansion of business and capturing the present market. The analysis of marketing strategy of NALCO was based on the following parameters: 1) The Marketing Mix (The 4 P's of Marketing); 2) The BCG Growth-Share Matrix; 3) SWOT Analysis; 4) 7S Framework. And others...
2.0 Objectives of the study
To help the company to understand its position with respect to its major competitors in the market, and provide business competitive intelligence. To understand the present Marketing strategy deeply so to provide a proactive, planned and informed approach to its future strategies in order to gain an upper hand. To analyze the present product line of the company that how effective they are. To find out company’s strengths and weakness and also the threats as well as opportunities. To find out the work style of man power. To observe the action of competitors, that might help the company to learn more about the market. To show the company new ways of expanding the business
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3.0 The relevance of the topic for the company Today is the age of competitions so each and every company is aggressive in capturing new opportunities available to gain market share. If the company is aware of its position respect to its major competitors in the market, and have business competitive intelligence can act proactively to gain an upper hand. Also the company should have knowledge about the effectiveness of their products. Apart from these this study also helps the company to know its strengths and weakness and also the threats as well as opportunities; its work style of manpower; its competitors; the procedure of pricing. Domestic procedure, export procedure and show new ways of expanding the business. These are quite pertinent aspects for the growth of the company.
4.0 Limitations of the Study
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The limitations of the study are linked to information gathered from various sources and the interpretation of the information. Also with the exception of a few information sources like forecasted financial statements, this is particularly the case if there are a lot of structural changes happening in the sector and all the players are expected to have dynamic Marketing strategy to capture their market.
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PROFILE OF ALUMINIUM
5.1 Profile of Aluminium 5.1.1 Background Aluminum is the third most abundant element of the Earth’s crust, behind that of oxygen and silicon. Of the metallic elements, it is the most abundant, 7.3% by mass of the total crust. Due to Aluminum’s high affinity to bind with oxygen, it is not found in naturally occurring in its elemental state, but only in combined forms such as oxides or silicates. The ancient Greeks and Romans used aluminium salts as dyeing mordant and as astringents for dressing wounds; alum is still used as a styptic. The metal originally obtained its name from the Latin word for alum, alumen. The name alumina was proposed by L. B. G. de Moravia, in 1761 for the base in alum, which was positively shown in 1787 to be the oxide of a yet to be discovered metal. Finally, in 1807, Sir Humphrey Davy proposed that this still unknown metal be referred to as aluminum. This was then altered further to that of aluminium so to agree with the "ium" spelling that ended most of the elements. This is the spelling that is generally used throughout the world. That is, until the American Chemical Society in 1925 officially reverted the spelling back to aluminum, which is how it is normally spelled in the United States. Though the existence of Aluminum was established by Sir Humphry Davy in 1808, it would take years upon years of deliberate research to find an efficient method to unlock the metal from its ore and even more years to create a production process that would allow the metal to be commercially practical. Famous British writer Charles Dickens is well know for his sharp social commentary and well observed wit. Less well know perhaps are Dickens's opinions on aluminium. Over 140 years ago, approximately 30 years before the work of Hall and Héroult, Dickens became very interested in the discovery of a new metal that he believed would have an outstanding future. The metal was aluminium, and in 1857 he wrote:
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"Within the course of the last two years ... a treasure has been divined, unearthed and brought to light ... what do you think of a metal as white as silver, as unalterable as gold, as easily melted as copper, as tough as iron, which is malleable, ductile, and with the singular quality of being lighter that glass? Such a metal does exist and that in considerable quantities on the surface of the globe." "The advantages to be derived from a metal endowed with such qualities are easy to be understood. Its future place as a raw material in all sorts of industrial applications is undoubted, and we may expect soon to see it, in some shape or other, in the hands of the civilized world at large."
5.1.2 Time Line In 1821 P. Bertheir discovers outside a small village in the south of France a clay-like material that contains 52 per cent aluminium oxide. He gives this ore the name bauxite. He does not realize it at the time, but he had discovered the most commonly found ore of aluminium. Four years later in 1825, Has Christian Oersted was able to obtain tiny amounts of actual aluminium metal through a painstaking process of heating anhydrous aluminum chloride with potassium amalgam and then distilling away the mercury. The residue that remained was that of impure aluminum. Between the years of 1827 and 1845, Frederick Wohler would improve upon this process by substituting potassium for the amalgam and finding a better method for the dehydration step of the final aluminum product. Wohler also is credited with establishing the specific gravity, or density, of aluminum, which officially demonstrated one of the metal’s now most well known qualities, it’s amazing lightness. 5.1.3 Key Dates 1808 Sir Humphry Davy (Britain) established the existence of aluminium and named it. 1821 P. Berthier (France) discovers a hard, reddish, clay-like material containing 52 per cent aluminium oxide near the village of Les Baux in southern France. He called it bauxite, the most common ore of aluminium. 1825 Hans Christian Oersted (Denmark) produces minute quantities of aluminium metal by using dilute potassium amalgam to react with anhydrous aluminium chloride, and distilling the resulting mercury away to leave a residue of slightly impure aluminium. 1827 Friedrich Wöhler (Germany) describes a process for producing aluminium as a powder by reacting potassium with anhydrous aluminium chloride. 1845 Wöhler establishes the specific gravity (density) of aluminium, and one of its unique properties - lightness. 1854 Henri Sainte-Claire Deville (France) improves Wöhler's method to create the first commercial process. The metal's price, initially higher than that of gold and platinum, drops by 90% over the following 10 years. The price is still high enough to inhibit its widespread adoption by industry.
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1855 A bar of aluminium, the new precious metal, is exhibited at the Paris Exhibition. 1885 Hamilton Y. Cassner (USA) improves on Deville's process. Annual output 15 tones!
1886 Two unknown young scientists, Paul Louis Toussaint Héroult (France) and Charles Martin Hall (USA), working separately and unaware of each other's work, simultaneously invent a new electrolytic process, the Hall-Héroult process, which is the basis for all aluminium production today. They discovered that if they dissolved aluminium oxide (alumina) in a bath of molten cryolite and passed a powerful electric current through it, then molten aluminium would be deposited at the bottom of the bath.
P. Héroult.
Héroult's Patent.
C.M. Hall.
Hall's Patent.
5.1.4 Properties of Aluminium A piece of aluminium metal about 15 centimeters long, with a U.S. cent included for scale. Aluminium is a soft and lightweight metal with a dull silvery appearance, due to a thin layer of oxidation that forms quickly when it is exposed to air. Aluminium is nontoxic (as the metal), non-magnetic, and non-sparking. Pure aluminium has a tensile strength of about 49 megapascals (MPa) and 400 MPa if it is formed into an alloy. Aluminium is about one-third as dense as steel or copper; is malleable, ductile, and easily machined and cast; and has excellent corrosion resistance and durability due to the protective oxide layer. Aluminium mirror finish has the highest reflectance of any metal in the 200-400 nm (UV) , and the 3000-10000 nm (far IR) regions, while in the 400-700 nm visible range it is slightly outdone by silver, and in the 700-3000 (near IR) by silver, gold and copper. It is the second most malleable metal (after gold) and the sixth most ductile. Aluminium is a good heat conductor, which is why it is often used to make saucepans.
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.
Fig 1. BOHR Diagram. 5.1.5.1 The ore: Bauxite The most common aluminium ore is bauxite. The name "bauxite" comes from the southern France village of Les Bauxs where it was discovered in 1821. The term bauxite actually refers to any ore or mixture of minerals that is rich in the oxide that is formed from aluminous rocks. Most bauxite contains about 40-60% alumina. Deposits are found all over the world, from Spain through Southern France, Italy, Austria, Hungary and Greece, (providing the base for the European aluminum industry), with even larger deposits in subtropical and tropical regions of Africa, West Indies, South America and Australia. Bauxite is refined first into aluminium oxide trihydrate (alumina) and they electrolytic ally reduced into metallic aluminum. It takes two to three tones of bauxite to produce one ton of alumina and two tones of alumina to produce one ton of aluminum metal. ALUMINIUM PRODUCTION
Aluminium ore, most commonly bauxite, is plentiful and occurs mainly in tropical and subtropical areas: Africa, West Indies, South America and Australia. There are also some deposits in Europe. Bauxite is refined into aluminium oxide rehydrate (alumina) and then electrolytic ally reduced into metallic aluminium. Primary aluminium production facilities are located all over the world, often in areas where there are abundant supplies of inexpensive energy, such as hydroelectric power. Two to three tonnes of bauxite are required to produce one tonne of alumina and two tonnes of alumina are required to produce one tonne of aluminium metal.
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The aluminium industry relies on the Bayer process to produce alumina from bauxite. It remains the most economic means of obtaining alumina, which in turn is vital for the production of aluminium metal - some two tonnes of alumina are required to produce on tonne of aluminium
5.1.5.2 The Bayer Process The aluminium industry relies on the Bayer process to produce alumina from bauxite. It remains the most economic means of obtaining alumina, which in turn is vital for the production of aluminium metal - some two tonnes of alumina are required to produce one tonne of aluminium.
Fig 2. Entire Bayer Process The primary aluminium industry is dependent on a regular supply of alumina for four functions:
1. Basic raw material for aluminium production 2. Thermal insulator for the top of electrolytic cells 3. Coating for prebaked anodes Page2
4. Absorbent filter for cell emissions
5.1.5.3. Alumina Production Bauxite is washed, ground and dissolved in caustic soda (sodium hydroxide) at high pressure and temperature. The resulting liquor contains a solution of sodium aluminate and undissolved bauxite residues containing iron, silicon, and titanium. These residues sink gradually to the bottom of the tank and are removed. They are known colloquially as "red mud".The clear sodium aluminate solution is pumped into a huge tank called a precipitator. Fine particles of alumina are added to seed the precipitation of pure alumina particles as the liquor cools. The particles sink to the bottom of the tank, are removed, and are then passed through a rotary or fluidized calciner at 1100°C to drive off the chemically combined water. The result is a white powder, pure alumina. The caustic soda is returned to the start of the process and used again. 5.1.6 Aluminium’s Life Cycle There exists a significant potential to reduce greenhouse gas emissions through the increased use of aluminium in transportation applications and from the increased use of recycled aluminium. But there also is a challenge because of the relatively high-energy consumption and greenhouse gas emissions associated with the production of primary aluminium. In 1997 the Member Companies of the International Aluminium Institute (IAI) (who represent most of the World's production of primary aluminium excluding Russia and China) concluded that the Industry needed to develop as complete an understanding as possible of the positive contributions that aluminium makes to the environmental and economic well-being of the world's population as well as of any negative economic or environmental impacts that its production might cause. Therefore a Life Cycle Analysis study was initiated. The scope of the study goes far beyond the production processes alone. It also covers the impacts and benefits of the material throughout the lifespan of the different aluminium products including its reuse and recycling. The IAI therefore chose as its first task the quantification of the carbon dioxide and per fluorocarbon greenhouse gas (GHG) emissions from the worldwide aluminium industry and secondly the development of estimates of the implications in terms of Greenhouse Gas Emissions of the increased use of aluminium for the manufacture of cars and trucks. Data on energy consumption and greenhouse gas emissions associated with aluminium production, product utilization and recycling was gathered from over 80% of the worldwide industry including estimates from Russia and China.
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5.1.6.1 Alumina-Bauxite Refining To produce primary aluminium metal, bauxite ore is mined , transported to processing plants called refineries, crushed, digested precipitated and calcined to produce alumina (Al 2O3 ) powder in the Process. On average, alumina refining consumes 75 kg of caustic soda and 48 kg of lime
per metric tonne of alumina. Greenhouse gas emissions of 991 kg of CO 2e (carbon dioxide equivalents) per metric tonne of alumina are generated primarily from fuel consumption and from energy consumed in producing the lime and caustic soda ancillary materials.
Fig.3 Alumina-Bauxite Refining 5.1.6.2 Aluminium Smelting Primary aluminium is produced by the Hall-Heroult electrolytic process in which alumina is reduced to aluminium metal at a carbon electrode or anode in the following reaction: 2Al2O3 + 3C -----> 4Al + 3CO2 This alumina is dissolved in a molten cryolite bath, and electric current is passed through this solution, thereby separating the alumina into aluminium and oxygen. The oxygen immediately reacts with the carbon anodes to produce carbon dioxide as an off gas.
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Data was received in 1999 from worldwide aluminium smelters producing 19.8 million metric tonnes of primary aluminium that represents 89% of worldwide aluminium smelting operations. Across all technologies, electricity consumption averaged 15.95 kWh per kg of molten metal. The consumption of fuels to produce this electricity generated 5.8 metric tonnes of CO 2 per tonne of metal. An additional 1.6 metric tonnes of CO 2 per metric tonne are generated in the electrolytic process.
5.1.7 Aluminium Sustainability
Aluminium is a sustainable material. At the current primary aluminium production level, known bauxite reserves will last for hundreds of years. More than 55 per cent of the world's aluminium production is powered by renewable hydro-electric power. Products made from aluminium can be recycled repeatedly to produce new products. The increasing use of recycled metal saves both energy and mineral resources needed for primary production. The IAI has produced the "Aluminium for Future Generations Sustainability Update". 5.1.8 Transport High aluminium content vehicles can be up to 50 per cent lighter than conventional vehicles. The consequent fuel savings over the lifetime of a vehicle far more than repay the initial investment in energy to make primary aluminium. Lighter cars, trucks and trains mean less fuel consumption and emissions, less wear and tear on roads and tracks. As vehicle emissions contribute up to one-third of global greenhouse Gas emissions, replacement of the current stock of vehicles with high aluminium content, lighter, low emission vehicles will make a significant contribution to the reduction of greenhouse gas emissions. 5.1.9 Recyclability
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Almost every aluminium product can be commercially (i.e. profitably) recycled at the end of its useful life, without loss of metal quality or properties. The increasing use of recycled aluminium in many applications (up to 60 per cent in vehicles) gives aluminum’s established credibility as a "green" metal a further boost.
5.1.10 Aluminium in Building In buildings, aluminium panels are corrosion resistant and therefore virtually maintenance free. Aluminium's lightness means easy construction, while its thermal insulation properties derived from the ability to design thermal breaks in extrusions, and from aluminium foil's reflectivity, conserve heating energy. Aluminium buildings look good too! A large amount of waste building materials go to landfill sites at a cost to both the economy and the environment. In contrast aluminium is recycled in a way that pays for itself and is sustainable. 5.1.11 Aluminium in Packaging Aluminium in packaging preserves food quality and avoids waste, and its low weight reduces fuel consumption and emissions during transportation. 5.1.12 Aluminium and Electric Power Aluminium's high conductivity makes it an excellent material for electrical power transmission over long distances. The use of aluminium cables reduces power losses significantly and therefore conserves energy. 5.1.13 Aluminium and Water WHO recognized the beneficial effects of the use of aluminium as a coagulant in water treatment to remove unwanted material including several organisms known to cause disease Aluminium has indeed fulfilled Dickens's prophecy ... but even he would no doubt be amazed at the thousands of different products in which it is now used throughout the world. 5.1.14 Aluminium Applications
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Aluminium –wonder metal has many remarkable features: Aluminium weighs only 0.34 times as much as iron. Aluminium is a good reflector of thermal, optical & electromagnetic radiation. Pure unalloyed Aluminium is soft, but Aluminium alloys may surpass the tensile strength of steel. Even minor additions of iron have no significant magnetic field of Aluminium. Aluminium surface can be reinforced to protect from weather & chemical corrosion. The metal & its source are non- toxic and it is therefore an important packaging material for food. Aluminium is equivalent in conductance while being 50% lighter. Aluminium can be formed into different shapes by any of the usual process in industry.
Aluminium permits rapid heat dissipation. Many possibilities are available for treating and texturing Aluminium surface . Table 1. Aluminium applications Sector
Major application
Transport Automobiles
Radiators, engine components , body sheets
Aerospace
Structural components, commercial airframes
Rail
Wagons, coaches
Packaging
Beverage containers, food containers, aerosols, Packets, caps and closures.
Building
Cladding, roofing, window and door frames, fencing
Electrical engineering
Bus bars, transformers,generators,conductor & cables
Mechanical engineering
Bearings, heat exchangers, hydraulic system
Household application
Refrigerators and freezers
Machinery and equipments
Irrigation piping, agricultural machineries, chemical Appliances.
Market Position of Aluminium Page2
Table: 2 ranking of the top 10 countries in world with respect to aluminium production. NAME
RANK
CHINA
(16,800 thousand of tones)
1
RUSSIA
(3850 thousand of tones)
2
CANADA
(2920 thousand of tones)
3
AUSTRALIA
(1950 thousand of tones)
4
UNITED STATE
(1720thousand of tones)
5
BRAZIL
(1550 thousand of tones)
6
INDIA thousand of tones)
(1400
7
UNITED ARAB EMIRATES
(1400 thousand of tones)
8
BAHRIN
(870 thousand of tones)
9
NORWAY
(800 thousand of tones)
10
Table: 3 Production of aluminium in India. (Unit in tones)
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Location Company
2008-09
2009-10
2010-11(up to Dec 2010**)
NALCO
3,61,262
431488
3,32,195
Damanjodi (Orissa)
HINDALCO
5,23,453
5,55,404
3,99,253
Renukoot (UP)
MALCO
23,224#
BALCO@
_
_
Chennai(Tamil Nadu)
3,56,781
2,68,452
1,92,383
Korba (MP)
VAL
82,031
2,69,083
2,76,013
Pune (MH)
TOTAL
13,46,751
15,24,751
11,99,844
_
# MALCO has closed its smelter since December, 2008. @ BALCO has closed its old smelter of 1,00,000 tonnes per annum capacity due to its nonviability. ** Compiled on the basis of information provided by primary aluminium producers to the Ministry. It is an intermediate product obtained from bauxite for production of Aluminium. Many developing countries, which are having plenty of bauxite reservoirs and are, having high cost of power generation, prefer to produce Alumina as value added product for export purpose rather than exporting bauxite. On the other side the countries having cheaper energy availability want to improve Alumina for their smelter instead of bauxite so as to reduce tonnage and transport problem. The production of Alumina in India started in 1945. Since then the capacity of the same has increased from 4000 tones to 2.0 million tones at present. The demand of Alumina in the present past is well in near future in the world along with prices are given. Table 4. Top 10 Aluminium Producers (in world,companies)
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RANK COMPANY
Figures in million tonnes
1
UC RUSAL
4,153
2
Alcoa
3965
3
Alcan
3454
4
Chalco
2034
5
Hydro Aluminium
1576
6
BHP Billiton
1349
7
Dubal
872
8
Rio Tinto
864
9
Alba
860
10
Centuty Aluminium
741
Table 5.NALCO CAPACITY NALCO BAUXITE MINES
CAPACITY AFTER (2ND)EXPANSION
4.8 MPTY
6.3 MPTY
ALUMINIUM REFINERY
1.575MTPY
2.1 MPTY
ALUMINIUM SMELTER
3,45,000 TPY
4,60,000 TPY
8*120 MW
10*120 MW
CAPTIVE POWER PLANT
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EXISTING CAPACITY
Table 6. Region Wise Sales Structure of Alumina Products
WESTERN EASTERN SOUTHERN NORTHERN
AL hydrate
489.364
1378.304
4754.108
Calcined alumina
4168.592
2049.641
2448.227
Spe.Grade hydrate 1.423
507.154
18.598
9.716
Special alumina
429.9
178.509
496.943
20.605
Zeolite
4342.983
35.608
27.72
3485.916
Table.7 . Dominant Players of Aluminium Industry
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COMPANIES
CAPACITY(000MTY)
ALCOA
4317
ALCAN
1760
PECHINEY
1105
BILLITON
901
HYDRO ALUMINIUM
751
RIO TINTO/ COMALCO
749
ALUSAF
660
KAISER
519
TOTAL WESTERN COUNTRIES
18200
GLOBAL
25,400
Table 8. Aluminium Ore Capacity of Top 10 Countries (in million tonnes):
COMPANY
ALUMINA
ALUMINIUM
BAUX. RESR CAPACITY
CAPACITY
CAPACITY
8200
16.65
.60
AUSTRALIA 4572
39.55
9.91
1.422
BRAZIL
3072
7.66
1.23
1.213
JAMAICA
2032
9.85
1.6
INDIA
2650
4.50
1.64
GUYANA
1020
3.00
.62
GREECE
760
3.71
.148
INDONESIA
710
1.30
.225
SURINAM
500
1.30
.030
VENZUELA
500
1.00
GUINEY
ESTIMATED
MINING
1.35
.633
.630
5.1.15 Global Consumption and Domestic Consumption The growth of worldwide consumption has been well over 8% per year till mid 70’s. But by the year 2001, the global consumption of Aluminium has declined by about 4%. Out of the global consumes about 27%. Hence, in case of any economic slow down in the western world , especially in the US and JAPAN , it will affect the significantly by 12% in the USA and 6.7% in JAPAN, where as in china, CIS and middle east, there was an excellent demand of 10% , 9% and 16% respectively during the same period. During the year 2003-04 , the world consumption of primary Aluminium is about 28,103 MT against the world’s production of about 28, 489 MT million tones and there by creating a net surplus of 386 MT in the global market. During the same period the world supply of Aluminium is around 35,085 MT against the total world consumption of 34, 852 MT there by showing a deficit of 203 MT. since the economies of EUROPE, JAPAN, other western world and US still remain bearish, the global market has to face uncertainties . However, the strong Chinese demand has helped the Indian industry.
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Table 9. Global Trend of Aluminium Usage (Consumption):
SECTORS
USAGE
Transportation
32%
Packaging
21%
Construction
13%
Electrical
07%
Consumer durables
07%
Machinery & equipment
06%
Others
14%
Table 10. Aluminium Usage of Western World and India (%) SECTORS
WESTERN WORLD
INDIA
Transportation
27%
18%
Packaging
22%
07%
Construction
21%
06%
Electrical
08%
35%
Consumer durables 07%
72%
Others
22%
15%
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Table 11. Country Wise Usage of Aluminium in Different Sector (%) SECTORS
INDIA
USA
UK
JAPAN
Electrical
35
9.30
8.60
7.6
Transport
18
20.10
21.90
31.5
Consumer durable 12
7.5
7.10
Packaging
7
35.40
10.50
9.7
Construction
06
16.9
15.45
25
Others
22
10.70
30.45
26.2
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Table 12. Usage of Aluminium in India SECTORS
INDIA
TRANSPORTATION
18%
PACKAGING
07%
CONSTRUCTION
06%
ELECTRICAL
35%
CONSUMER DURABLES
12%
OTHERS
22%
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PROFILE OF NALCO
5.2 Profile of Nalco 5.2.1 Mission "To develop and strengthen technology expertise pertaining to Bauxite, Alumina and Aluminium in the next five years, which will enable NALCO to be self sustained in the field of Bauxite mining, Alumina Refining and Aluminium Smelting technology.” “To achieve growth in business with global competitive age providing satisfaction to the customers, employees, share holders and community at large.” 5.2.2 Vision "To set up world class, state of the art research and development facilities to enable NALCO to achieve excellence and sustainability in process, product and technology in the field of Bauxites, Alumina, Aluminum, Power and allied areas including downstream products. 5.2.3 Objectives
To maximize capacity utilization. To optimize operational efficiency and productivity. To maintain highest international standards of excellent in product quality, cost efficiency and customer service. To provide a steady growth business by technology up gradation, expansion of diversification. To have global presence and earn foreign exchange. To maintain leadership in domestic market. To install financial discipline at all levels for achieving cost and budgetary controls , optimize utilization of working capital and effective cash flow management To maximize return on investment To develop a strong R&D base and increase business development activities. To promote a result oriented organizational ethos and work culture that empowers employees and helps realization of individual and organizational goals.
5.2.4 AWARDS & ACCOLADES
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● Indra priyadarshini Vrikshamitra Award by Govt.of India-1994 ● First CAPEXIL Export Award-1988
● London Metal Exchange Registration-May 1989 ● First EEPC Export Award-1998-99 ● Indra Gandhi Paryavaran puraskar by Govt. of India-2000 ● FIEO Niryat Shree Awartds-2005-06 ● Navaratna Status-2008 ● Premier Trading House Status-2009 ● 500th shipment of Alumina from Vizag port-2010 ● Best listed CPSE Awards-2010 ● ISO 9001:2000,ISO 14001,OHSAS 18001 & SA 8000 Certifications ● Nalco achieves record production and sales in 2010-11
Nalco Today Today as an ISO 9001 company, Nalco has emerged as the largest integrated Bauxite-AluminaAluminium complex in Asia enabling India to witness a quantum jump in Alumina and Aluminium production. The company for the final time created exportable surplus Alumina and Aluminum production. The company for the first created exportable surplus in Alumina and helped India top focus on its massive Bauxite resources in the east coast export oriented Aluminum plants. 5.2.5 Segments of Nalco NALCO has emerged as the largest integrated Bauxite-Alumina-Aluminium complex in Asia enabling India to witness a quantum jump in Alumina and Aluminium production. The company for the final time created exportable surplus Alumina and Aluminium production. The company for the first created exportable surplus in Alumina and helped India top focus on its massive Bauxite resources in the east coast export oriented Aluminum plants . The integrated complex has five segments like Bauxite mine, Aluminum refinery, Aluminum smelter, Captive power plant and port facilities.
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5.2.5.1 Bauxite Mine NALCO's bauxite mine, spread over 18 kms., is located at Panchpatmali hills in Koraput District of Odisha. The original mining capacity of 4.8 million tonnes per year(MTPY) is being upgraded to 6.3 MTPY under the 2nd phase expansion, which will be further upgraded to 6.8 MTPY under
the up gradation project of mines & refinery. Approximately 90% of the bauxite from the mine represents Gibbsitic Alumina, also called Tri-hydrate Alumina, a property which allows it to be digested at a relatively low temperature and at atmospheric pressure during the alumina refining process. On Panchpatmalli hills of Koraput district in orissa a fully mechanized open cast mine of 24 million tpy capacity is in operation since November1985 serving feed stock to Aluminum refinery at Damon Jodi the capacity is being expanded to 4.8 million tpy capacity. The Salient Feature:
Area of deposit – 18sq.Km Life of deposit – Over 100 years Ore Quality – Aluminum 45%,Silica 2%
5.2.5.2 Alumina Refinery Alumina refinery plant of the Company is situated at Damanjodi in Koraput District of Odisha. The plant is located about 14 kms. from the Panchpatmali bauxite mines. The mined bauxite is transported to refinery plant by a 14.6 km long single flight multi curve 1,800tonnes per hour (TPH) capacity cable belt conveyor, unique of its kind in India. Bauxite is processed and refined and alumina is produced and transported to aluminum smelter plant at Angul as well as to the storage and handling facilities at Visakhapatnam port by specially designed rail wagons. The present capacity of alumina refinery is 1.575 MTPY consisting of three production lines of each of 525,000 metric TPY. The capacity is being augmented to 2.1 MTPY under 2nd phase expansion with addition of one more stream and it will be further enhanced to 2.275 MTPY under the up gradation project of mines & refinery. The produced alumina is transported to Angul to cater to the requirements of the smelter plant for production of primary aluminium metal, alumina that remains surplus after internal consumption at smelter plant is sold to third parties primarily in the export markets. The unique features of NALCO's alumina refinery are cent per cent capacity utilization, use of temperature atmospheric digestion technology, production of sandy calcined alumina and cogeneration of power for its captive use. The process technology was provided by Aluminium Pechiney (now Rio Tinto Alcan)
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5.2.5.3 Alumina Smelter The Company's aluminum smelter plant is situated at Angul in Odisha. The smelter plant is about 699 kms. from the alumina refinery plant, 5 kms. from the captive power plant, 564 kms. from Visakhapatnam port facilities, 194 kms. from the Paradeep port and 551 kms. from the Kolkata port. The aluminum metal produced at aluminum smelter plant is transported to Visakhapatnam port and also to Paradeep port by rail for domestic sale as well as for export.
The production capacity of 3,45,000 TPY has been further increased to 4,60,000 TPY under the 2nd Phase Expansion of the Company. The smelting process is carried on by using electrolytic reduction for conversion of alumina into primary aluminium metal. From the pot-line, the molten aluminum is routed either to casting units, where the aluminum is cast into ingots, sow ingots, billets, wire rods, cast strips and alloy ingots, or to holding furnaces at flat aluminum products unit where the molten aluminum is rolled into various cold-rolled products or cast into aluminum strips. The aluminum smelter operates on one of the modern electrolysis technology, namely the AP-18 provided by Aluminum Pechiney (now Rio Tinto Alcan), which is being upgraded from time to time. Salient Features:
Advance 180 KHz cell technology. Micro processor based port regulation system. Pume treatment plant with dry scrubbing system for pollution control. Integrated facility for manufacturing anode carbon.
All the activities in production process of Nalco carry out by different section like: 5.2.5.3.1Pot Rooms The main process area of the smelter is port rooms. At Nalco smelter there are 4 pot rooms each of 800 metres of length and 19 metres of width. Each pot room house has 120 pots, like this 240 pots forms one pot line and there in total 480 pots are 2 pot lines in smelter. The 120 pots located in a pot rooms are divided by the centre passage into 2 groups of 60 pots each. 5.2.5.3.2Cathode System The cathode system consists of a rigid rectangular still rank of size 10.24m*4.95m*1.79m lined with insulating and fire brick for heat insulation the ceramic reactories are covered with carbon reactories both at the button and the sides which forms the hearth and receptable for molten aluminum and fluoride salt bath. 5.2.5.3.3 Anode System It consists of 16 pre backed anodes dipping in the molten electrolyte contained in the cathode cavity. The individual pre backed anode assembly consists of carbon block attached to a bracket which again is connected with a long aluminum bar called the anode system.
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5.2.5.3.4 Carbon Area or Anode Plant Nalco anode plant consists mainly of 3 areas namely 1. green anode plant
2. backing furnaces 3. rodding shop In the green anode plant carbon paste is manufactured from calcined petroleum coke and coal far pitch. The formed anodes are backed in the backing furnaces to obtain the necessary mechanical strength and electrical conductivity. The backed anodes are sent to the rodding shop where the anodes are fitted with the stem brackets. 5.2.5.3.5 Cast House The molten Aluminum tapped out from the pots periodically is sent to the cast house where it is cast into ingots, at Nalco smelter cast house receives and cast the entire 221,000 tones of liquid aluminum each other. The metal tapped in transported to the cast house in open ladles and stored in the holding furnaces. In all there are & number holding furnaces each of 38 MT capacity. 5.2.5.4 Captive Power Plant The coal based captive power plant of the Company is strategically located about 5 kms. away from the aluminium smelter plant at Angul to have access to low cost electric power and to minimize transmission losses of power. The location of captive power plant at Angul was strategically planned at the proximity of Talcher coalfields. NALCO sources major coal requirements for its captive power plant from Talcher coalfields through 18.5 kms. captive railway system enabling transport of critical and bulk requirement of coal at relatively low cost. The captive power plant has an electric power generation capacity of 1200 MW by way of ten turbo generators, each rated at 120 MW. The captive power plant meets the entire electric power requirement of aluminum smelter plant. It also provides approximately 35% of the electricity power requirement of alumina refinery plant besides supplying the surplus power to state grid 5.2.6 Raw Materials Used
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The basic raw materials required for the production of aluminum are electronic energy alumina, CGM line white brand, caustic soda, hydrate alumina, some other raw materials required for smelter like calcinade petroleum, coke and coal for pitch, available from Baruni-Haladiarefineries and vizag steel plant respectively, the actual requirements of other raw material of this plant as follows. Calcined petroleum coke-87.100 tones Coal tan pitch-27,000 tones Heavy fuel oil – 12,390 tones Heal transper fluid- 3000 Process water- 20000M Salient Features
Micro processor based burner management system for optimum thermal efficiency.
Computer controlled data acquisition system for online monitoring. Automatic turbine run-up system Specially designed barrel type high pressure turbine. Electrostatic precipitators with advanced intelligent controllers. Wet disposed of ash.
The raw water for the plant is drain from river Brahmani through a 7 KM long double circuit pipe line, discharging 7200 m3 /hour of water. The coal demand is met from a mine of 3.5 million tone capacity opened up for Nalco at bharatpur in talcher by Mahanadi coal fields ltd. The power plant is interconnected with the static grid.
5.2.7 Products 5.2.7.1 Aluminium Metal (CG, EC&LME grades) 1. 2. 3. 4. 5.
Ingots (Standard Ingots,sow Ingot,T-ingots) Wire Rods Billets (in 5 size) Alloy wire rods Cast strips
5.2.7.2 Alumina & Hydrate 1.Calcinated Alumina 2.Alumina hydrated
5.2.7.3
Specialty Alumina & Hydrates
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5.2.7.4 Rolled products (coils & sheets)
(INGOTS) (SOWS INGOTS)
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(BILLETS)
(T-INGOTS)
(WIRE RODS) (ROLLED PRODUCT)
5.2.8 Plant Location
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Nalco Nagar is situated within 5km of Angul town. Angul was once a tidal state. It is fairly big and bustlingly town on the national highway no.42 which is the main highway connecting Bhubaneswar with Raipur (MP), sambalpur, sundarghar and Rourkela. Nalco has established its smelter plant, captive power plant and its town ship close to the national highway. The place is easily accessible from Cuttack and Bhubaneswar by road and rail. Today in the vicinity of Angul a large number of industries have come up. The other important industry in and around this place are heavy water of atomic energy, Commission talcher, coal mines of mahanadi coal fields limited and thermal power plants of NTPC. The Nalco town ship known as Nalco nagar is modern and well planned. In addition to 2947 dwelling units and trainees hostel with 300 rooms, Nalco nagar may civic facilities like community centres, clubs , stadium , swimming pool, market complexes etc. it has establish 50 bedded hospital with ultra modern facilities. 5.2.9 Organizational Structure
Nalco is a govt. of enterprise under the administration control of the ministry of mines. The company is managed by board of directors appointed by the president of India. The board consists of 16 directors including the chair-cum managing director of the company. There are 6 full time functional directors heading production, finance project & technical, personnel &administrative disciplines. There are our senior govt. officials nominated to the board as directors on ex-officio basis. Besides there are 2 non official directors in the board appointed to present the interest of financial institution, allied industry & R&D objectives of the company. Thus the board of company is a full of highly experienced & outstanding potentials drawn from various fields of specialization. The management control system is based on delegation of authority & individual accountability for results. The responsibility and authority to take decisions on various matters are delegated by the chairman-cum-MD to different levels in the management. 5.2.10 Human Resource About 7393 persons possessing a verity of skills, qualifications and competence are at the services of Nalco, Nalco is truly youth with the average age of the employees being below 40 years. Starting with a core group of 262 employees in the 1982, the progressive growth in man power has taken place in a planned manner matching the different stages of the project.
5.2.10.1 Composition of Manpower Skilled personnel-3717 Semi skill & unskilled personnel- 1041 Executives-1783 Supervisors-852 TOTAL : 7393 (Human Resources)
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5.2.11 Overall Industrial Relations Situation There are trade unions operating in the organization. But they are much concerned with their rights rather than duties. The trade union leaders are much interested in the training tours and other benefits provided by the company and least concerned about the worker’s problem and other activities for the development of the organization. They are guided by their self interest.
Common employees are not much committed towards trade unions. There is no recognized trade union. Before 3/4 year there was a trade union was recognized by secret- ballot method 5.2.12 Organizational Culture Nalco being a profitable public sector unit concerned about good relationships among the superior and subordinate, employee etc. in normal time people work loosely, thinking that the company is fulfilling its target. So there is no need for hard work. But in 1998 while it was facing a bad situation people devoted their heart and soul to the organization. The worked for day and night and brought the situation under control.
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The employees of Nalco are given a very big package with number of incentives and other facilities. But these actually do not motivate employees. Because incentives work for a short time. It is the fear motivation which works behind every employees and makes the employee motivated towards their respective jobs. Employees in Nalco are individually accountable towards their work. If a task is given to them, they accomplish the task in a proper manner and in a proper time.
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REVIEW OF LITERATURE
5.3 Marketing Strategy A marketing strategy is a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A marketing strategy should be centered around the key concept that customer satisfaction is the main goal. A marketing strategy is most effective when it is an integral component of firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement. 5.3.1 Basic theory The basic theory of marketing strategy is: Target Audience Proposition/Key Element Implementation The Five D's Tactics and actions A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy. For example: "Use a low cost product to attract consumers. Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, highermargin products and services that enhance the consumer's interaction with the low-cost product or service."
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A strategy consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives[5]. Plans and objectives are generally tested for measurable results. A marketing strategy often integrates an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. Similarly, the various strands of the strategy , which might include advertising, channel marketing, internet marketing, promotion and public relations can be orchestrated. Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group. Each one group is expected to take that strategy goal and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal measurable.Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics.
5.3.2 Types of strategies Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below: Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are three types of market dominance strategies:
Leader Challenger Follower –
Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage. Product differentiation Market segmentation Innovation strategies - This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:
Pioneers Close followers Late followers
Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers:
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Horizontal integration Vertical integration Diversification Intensification A more detailed scheme uses the categories:
Prospector Analyzer Defender Reactor
Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies. 5.3.3 Strategic models Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy.
Marketing in Practice
The Consumer-Centric Business
There are a many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered around Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges.The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps. Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven. Aldred Riachi Ph.D Developed a new strategic approach called the Five D's of competitive Advantage. The model emphasized on adopting the following: Develope, Distinguish, Diagnose, Decisiveness and Doctrine.
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Thus, for example, many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable. For most of their time, marketing managers use intuition and experience to analyze and handle the complex, and unique, situations being faced without reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed. This, almost instinctive management, is what
is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists. 5.3.3.1 The Marketing Mix (The 4 P's of Marketing) Marketing decisions generally fall into the following four controllable categories:
Product Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964 article, The Concept of the Marketing Mix. Borden began using the term in his teaching in the late 1940's after James Culliton had described the marketing manager as a "mixer of ingredients". The ingredients in Borden's marketing mix included product planning, pricing, branding, distribution channels, personal selling, advertising, promotions, packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome McCarthy later grouped these ingredients into the four categories that today are known as the 4 P's of marketing, depicted below:
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Fig 4. The Marketing Mix These four P's are the parameters that the marketing manager can control, subject to the internal and external constraints of the marketing environment. The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive response.
i) Product Decisions The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
Brand name Functionality
Styling
Quality
Safety
Packaging
Repairs and Support
Warranty
Accessories and services
ii) Price Decisions Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.) Suggested retail price
Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination
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iii) Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution decisions include: Distribution channels
Market coverage (inclusive, selective, or exclusive distribution) Specific channel members
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics
iv) Promotion Decisions In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
Promotional strategy (push, pull, etc.) Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget
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Limitations of the Marketing Mix Framework The marketing mix framework was particularly useful in the early days of the marketing concept when physical products represented a larger portion of the economy. Today, with marketing more integrated into organizations and with a wider variety of products and markets, some authors have attempted to extend its usefulness by proposing a fifth P, such as packaging, people, process, etc. Today however, the marketing mix most commonly remains based on the 4 P's.
Despite its limitations and perhaps because of its simplicity, the use of this framework remains strong and many marketing textbooks have been organized around it.
5.3.3.2 The BCG Growth-Share Matrix The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970's. It is based on the observation that a company's business units can be classified into four categories based on combinations of market growth and market share relative to the largest competitor, hence the name "growth-share". Market growth serves as a proxy for industry attractiveness, and relative market share serves as a proxy for competitive advantage. The growth-share matrix thus maps the business unit positions within these two important determinants of profitability.
Fig 5. BCG Growth-Share Matrix
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This framework assumes that an increase in relative market share will result in an increase in the generation of cash. This assumption often is true because of the experience curve; increased relative market share implies that the firm is moving forward on the experience curve relative to its competitors, thus developing a cost advantage. A second assumption is that a growing market requires investment in assets to increase capacity and therefore results in the consumption of cash. Thus the position of a business on the growth-share matrix provides an indication of its cash generation and its cash consumption. Henderson reasoned that the cash required by rapidly growing business units could be obtained from the firm's other business units that were at a more mature stage and generating significant cash. By investing to become the market share leader in a rapidly growing market, the business
unit could move along the experience curve and develop a cost advantage. From this reasoning, the BCG Growth-Share Matrix was born. The four categories are:
Dogs - Dogs have low market share and a low growth rate and thus neither generate nor consume a large amount of cash. However, dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture. Question marks - Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash comsumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.
Stars - Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation.
Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume. Such business units should be "milked", extracting the profits and investing as little cash as possible. Cash cows provide the cash required to turn question marks into market leaders, to cover the administrative costs of the company, to fund research and development, to service the corporate debt, and to pay dividends to shareholders. Because the cash cow generates a relatively stable cash flow, its value can be determined with reasonable accuracy by calculating the present value of its cash stream using a discounted cash flow analysis.
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Under the growth-share matrix model, as an industry matures and its growth rate declines, a business unit will become either a cash cow or a dog, determined soley by whether it had become the market leader during the period of high growth. While originally developed as a model for resource allocation among the various business units in a corporation, the growth-share matrix also can be used for resource allocation among
products within a single business unit. Its simplicity is its strength - the relative positions of the firm's entire business portfolio can be displayed in a single diagram. Limitations The growth-share matrix once was used widely, but has since faded from popularity as more comprehensive models have been developed. Some of its weaknesses are:
Market growth rate is only one factor in industry attractiveness, and relative market share is only one factor in competitive advantage. The growth-share matrix overlooks many other factors in these two important determinants of profitability. The framework assumes that each business unit is independent of the others. In some cases, a business unit that is a "dog" may be helping other business units gain a competitive advantage. The matrix depends heavily upon the breadth of the definition of the market. A business unit may dominate its small niche, but have very low market share in the overall industry. In such a case, the definition of the market can make the difference between a dog and a cash cow.
While its importance has diminished, the BCG matrix still can serve as a simple tool for viewing a corporation's business portfolio at a glance, and may serve as a starting point for discussing resource allocation among strategic business units. 5.3.3.3 SWOT Analysis SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late 1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). The General Electric Growth Council used this form of analysis in the 1980's. Because it concentrates on the issues that potentially have the most impact, the SWOT analysis is useful when a very limited amount of time is available to address a complex strategic situation.The following diagram shows how a SWOT analysis fits into a strategic situation analysis.
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Situation Analysis / Internal Analysis /\
\ External Analysis /\
Strengths Weaknesses Opportunities Threats SWOT Profile The internal and external situation analysis can produce a large amount of information, much of which may not be highly relevant. The SWOT analysis can serve as an interpretative filter to reduce the information to a manageable quantity of key issues. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Strengths can serve as a foundation for building a competitive advantage, and weaknesses may hinder it. By understanding these four aspects of its situation, a firm can better leverage its strengths, correct its weaknesses, capitalize on golden opportunities, and deter potentially devastating threats. Internal Analysis The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and weaknesses. Factors should be evaluated across the organization in areas such as:
Company culture Company image
Organizational structure
Key staff
Access to natural resources
Position on the experience curve
Operational efficiency
Operational capacity
Brand awareness
Market share
Financial resources
Exclusive contracts
Patents and trade secrets
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The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses.
External Analysis An opportunity is the chance to introduce a new product or service that can generate superior returns. Opportunities can arise when changes occur in the external environment. Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to:
Customers Competitors
Market trends
Suppliers
Partners
Social changes
New technology
Economic environment
Political and regulatory environment
The last four items in the above list are macro-environmental variables, and are addressed in a PEST analysis. The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats.
SWOT Profile
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When the analysis has been completed, a SWOT profile can be generated and used as the basis of goal setting, strategy formulation, and implementation. The completed SWOT profile sometimes is arranged as Fig When formulating strategy, the interaction of the quadrants in the SWOT profile becomes important. For example, the strengths can be leveraged to pursue opportunities and to avoid threats, and managers can be alerted to weaknesses that might need to be overcome in order to successfully pursue opportunities.
Strengths
Weaknesses
1. 2.
1. 2. 3.
Opportunities
Threats
1. 2. 3.
1. 2. 3. Fig 5. SWOT profile
Multiple Perspectives Needed The method used to acquire the inputs to the SWOT matrix will affect the quality of the analysis. If the information is obtained hastily during a quick interview with the CEO, even though this one person may have a broad view of the company and industry, the information would represent a single viewpoint. The quality of the analysis will be improved greatly if interviews are held with a spectrum of stakeholders such as employees, suppliers, customers, strategic partners, etc. SWOT Analysis Limitations While useful for reducing a large quantity of situational factors into a more manageable profile, the SWOT framework has a tendency to oversimplify the situation by classifying the firm's environmental factors into categories in which they may not always fit. The classification of some factors as strengths or weaknesses, or as opportunities or threats is somewhat arbitrary. For example, a particular company culture can be either a strength or a weakness. A technological change can be a either a threat or an opportunity. Perhaps what is more important than the superficial classification of these factors is the firm's awareness of them and its development of a strategic plan to use them to its advantage.
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5.3.4 7S Framework It's all very well devising a strategy, but you have to be able to implement it if it's to do any good. The Seven S Framework first appeared in "The Art Of Japanese Management" by Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese industry had been so successful, at around the same time that Tom Peters and Robert Waterman were exploring what made a company excellent. The Seven S model was born at a meeting of the four authors in 1978. It went on to appear in "In Search of Excellence" by Peters and Waterman, and was
taken up as a basic tool by the global management consultancy McKinsey: it's sometimes known as the McKinsey 7S model. Managers, they said, need to take account of all seven of the factors to be sure of successful implementation of a strategy - large or small. They're all interdependent, so if you fail to pay proper attention to one of them, it can bring the others crashing down around you. Oh, and the relative importance of each factor will vary over time, and you can't always tell how that's changing. Like a lot of these models, there's a good dose of common sense in here, but the 7S Framework is useful way of checking that you've covered all the bases. The Seven Factors are:
Fig 6. 7s Model
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Strategy A set of actions that you start with and must maintain Structure How people and tasks / work are organised Systems All the processes and information flows that link the organisation together Style How managers behave Staff How you develop managers (current and future) Superordinate Goals Longer-term vision, and all that values stuff, that shapes the destiny of the organisation Skills Dominant attributes or capabilities that exist in the organisation
There's a lot more to the 7S framework of course, especially how you apply it in practice. It may appear as an outmoded concept in today's environment of "constant change and learning", but the basic principle that you've got to watch a lot of factors all the time as you implement any strategy still applies. Just don't let the apparent rigidity of the framework make you heavy on your feet.
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For more about strategy and strategic management in general, look out "Strategic Management" by Dess & Miller (McGraw Hill 1993). It's not a bedtime read, but is a useful reference work of ideas and case studies. If you want more on the 7S model, read Richard Pascale's subsequent "Managing on the Edge" (1990).
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ANALYSIS AND FINDINGS
6.0 Marketing Strategy Analysis of NALCO 6.1 4P’S of NALCO i) Products
Calcined alumina. Alumina metal. Zeolite. Special products. Alumina hydrate. Rolled products.
ii) Pricing The pricing strategy of NALCO is based on: 1) LME (London Metal Exchange). So, the price changes according to the changes in the LME. 2) Demand of the( Al )market or demand of the customers. 3) Pressure from competitors. As Nalco also has some strong competitors , pricing is done by keeping a keen view on the competitors. Overall, the pricing strategy of Nalco generally updated at a monthly basis but it changes according to the situation. iii) Promotion As the company’s present market is a buyers market, So its not required to spend money. but some where as a global company it need some promotion, NALCO use to do some small promotional activities, which we can see in form of CSR (Corporate Social Responsibility) like organizing cricket matches, funding journals etc…
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iv) Place Under this segment we will consider about how company move it’s products from place of production to place of consumption. For this NALCO has it’s stockyards almost all around the country which makes its logistics more efficient. The current stockyard are 1. BADDI 2. Bangalore 3. Biwandi 4. Chennai (SY) 5. Faridabad 6. Jaipur 7. Kolkata 8. Silvassa 9. Vizag
6.2 BCG Growth-Share Matrix of Nalco STAR
QUSTION MARK 1) Billets
1) T.Ingots
CASH COW 1) Aluminum sows 2) Calcined alumina
DOG 1) Rolled products 2) Special products 2) Zeolite
3) Alumina hydrate
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Fig 7. BCG Growth-Share Matrix of Nalco
6.3 SWOT Analysis of Nalco Strengths 1. 2. 3. 4. 5. 6. 7. 8.
It has a very rich bauxite mine. Nalco is one of the lowest cost procedure in its segment . It is one of the pioneer in the field of aluminium It has a strong technical man power. It uses one of the fully integrated operations Strong cash reserves with no debt Robust volume growth on back of recent expansion plans. Being a Navratna company it has a very strong good will.
Weakness 1. Being a public sector company , it has a slow decision making process compare to any private sectors. 2. Shortage in coal linkages has lead to higher share of imported coal at relatively much higher price. 3. The conservative policy like debt-free company during an major bull run also may hampered the Growth in long run. 4. It’s product mix basically targeting to primary product segments. 5. As Nalco is now in 30th year it needs new technologies to compete. Opportunities
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1. Despite current crisis, India is likely to remain second fastest growing economy 2. Government thrust on infrastructure would also continue albeit at modest pace 3. Automobile, consumer durables and engineering sectors are at very nascent stage compare to global scale 4. Low per capita housing and booming retail industry would drive construction demand 5. Low per capita aluminum consumption compare with other countries offers a higher growth 6. Rich Geological Resource base 7. Growing Skilled and Technical Human Capital. Threats 1. Instability in LME aluminum price (currently at five year low) will affect margin badly 2. Significant disruption in demand in developed countries from key consumer segment 3. Competition from scrap imports and very high threat from substitute materials particular plastics 4. Progressive reduction in aluminum import tariffs
5. 6.
Bureaucratic nature of Government - Socio-Political interventions (in leasing mines) Deficit infrastructure
6.4 7s Strategy Model Describing (Nalco) 1. Structure: How people and tasks / work are organized. NALCO is one of the well organized organization. The role of every employee is very clear to them. They are aware of the performance expected from them, So according to that they perform. 2. Strategy: A set of plan for the future actions that you start with and must maintain. Strategy applied by NALCO is basically a long term strategy. 3. System: A set of actions that is according to the strategy. In system we will consider the flow of information. Here the flow of information is from top to bottom i.e. the decision is taken at the upper level. 4. Style: How managers behave. As NALCO is one of the navaratna certified organization , it is very simple to say the upper level employees are very much cooperative to their subordinates, because of which they are today at this stage. 5. Staff: How you develop managers (current & future ). The staffing in NALCO is very good every department is headed by different chief manager, who are really deserving , and further more they are again provided with junior managers who are there to provide cooperation. So we can say the span of control is wide for the director but it is very easy to handle because of this staffing. 6. Superordinate Goals: Long term vision , and all that values stuff that shapes the destiny of the organization . Super ordinates goals in case of NALCO is same as that of the mission of the organization. 7. Skills: Dominant attributes or capabilities that exist in the organization. As the selection procedure of NALCO is very stringent, quality people are selected as employees. Therefore NALCO has a good reservoir of skills.
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7.0 DOMESTIC PROCEDURE OF NALCO,INDIA 7,1.PREAMBLE :
Nalco started sale of metal in domestic market from its smelter plant, Angul on Ex-works basis during 1987-1988 Based on the MOU between the company and Ministry of mines, the annual target is set for all products including metal . it is then bifurcated into export & domestic sales target. this annual target is further broken down product wise into monthly targets and subdivided into Regional targets . The targets are subject to change based on overall global and domestic market dynamics.
7.2.ANNUAL/MONTHILY TARGET SETTING FOR DOMESTIC SALE : With a view to achieve the target monthly meeting is held between marketing department, smelter plant, smelter dispatch section and traffic at the end traffic at the end of the previous month or beginning of the month to work out the suitable product mix on a month to month basis. the movement plan of the both export & domestic metal by Railway Rakes from plant to stockyards is worked out. Taking into consideration the month end stock at plant and stockyards along with the expected availability of metal for domestic sale from the monthly production ,the matter is discussed between the Regional offices and corporate Marketing department for procuring the purchase order/financial arrangements of customers.
7.2.1 SALE ORDER BOOKING : Nalcos product in the domestic market are open for purchase by any domestic customers. a. Direct enquiries from customer. b. Sales conferences/customer meet, c. Contracting buyers directly d. Responding to tenders floated usually by PSU’s/Govt./State Undertakings. 7.2.2 MODES OF PAYMENT: I. Advance payment in form of DD/cheque/SBI FAST CASH system ,RIGS etc… II.
Sight/ Usance LCs
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7.2.3 REVIEW OF PRICES,TERMS & CONDITIONS FOR SALES OF METAL IN THE DOMESTIC MARKET FOR VARIOUS PRODUCTS ARE GOVERNED THROUGH DELEGATION OF POWER : a. Delegation of powers(pricing committee)
1. 2. 3. 4.
Executive Director (Marketing) General Manager (Marketing) Dy.General Manager (Marketing-Finance) Dy General Manager (Marketing-Domestic)
b. Demand supply trend in domestic market, inventory holding ,LME price trend and other factors with the all term & conditions. 7.2.4 DESPATCH INSTRUCTION: Based on the purchase order of the customers & financials arrangements, corporate domestic marketing papers Despatch Instruction-DI whose numbering is computer controlled for despatches from Plant .the stock transfer DI’s to different stockyards are also prepared based on the indents received from the respective regions. 7.2.5 DELIVERY INVOICE: On receipt of DI from the domestic marketing of corporate office ,the dispatch department at plant ,will prepare delivery invoice with computerized control nos.,which will be used for removal of excisable goods from factory to buyers/stockyards. 7.2.6 PACKING LIST-CUM-MATERIAL GATE PASS-CUM-DESPATCH ADVICE Packing list cum material gate pass cum Despatch Advice with computerized control nos. is prepared by the dispatch departments ,smelter plant for each corresponding Delivery invoice & accompanies the copies of delivery invoice. 7.2.7 LORRY RECEIPTS (LR)/RAILWAY RECEIPTS(RR): Despatch Department, smelter plant obtains 2 copies of LR/RR (consignee copy and consignor copy) as the case may be and the third copy is to be retained by the transporter/Railway at source.
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7.2.8 COMMERCIAL INVOICE: Against all the delivery invoice issued to a particular customer in a day one commercial invoice subject to a maximum of six (6) consignments can be prepared by Finance Department smelter Plant to facilitate easy documentation of material delivered. 7.2.9 SALES FROM STOCKYARDS : a. The sales from the stockyard takes place under the control of regional offices/Branch offices b. Beside effecting sales from plant to meet the requirement of local manufacturers’ /SSI customers, NALCO also moves metal to its various stockyards for sale from stockyards.
c. For declaration of basic price for sale from stockyards ,the stockyard recovery charges are added to the basic price ex-smelter plant as ruling on date of removal of material to stockyard from smelter plant. d. While removing goods from smelter plants for sales from stockyards ,Excise duty is paid at smelter plant based price ex-smelter plant ,stockyard recovery charges and applicable discounts ruling on date of removal of goods from plant as per the statutory requirements. e. Customer makes financial arrangements i.e. Advance payment by DD/SBI FAST/ Cheque ,etc..or letter of credit with the Regional Offices for lifting material from stockyards. f. On receiving firm financial arrangements and other statutory documents ,metal is delivered to the customers from stockyards. g. Respective stockyards under the Regional Offices keep a detailed record of opening stock, receipt ,sales and closing stock product wise. 7.2.10 “E 1” FORMS : Buyers who sell in transit normally ask for E-1 forms. In such a case, the customer has to submit the following documents to the respective Regional Offices for the verification and following it to corporate office for further checking & issuance of E-1 forms. 1. Sales Tax Registration certificate copy of the customer specifying resale of aluminium metal/non-ferrous metal/aluminium products as the case may be. 2. Duty endorsed Lorry Receipts. 3. Copy of the C-form submitted 4. Certificate from the customer confirming the sale of metal in transit under section 6(2) of CST Act 1956. 5. Invoice copy of the customers(to the third party) 6. Any other statutory documents required from time to time.
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7.2.11 REFUNDS: Quite often, the customers after completion of monthly transactions ask for refunds for left over amount which are normally routed through Regional offices. On getting recommendations from Regional office the same is forwarded by corporate marketing section to marketing finance incorporating the necessary details based on which refunds may be effected to the customers through Regional Offices. In case of Orissa based buyers and some Govt./State undertakings/PSUs who directly deal with corporate marketing, the refund advice advice is processed from corporate marketing finance. After checking the correctness of the refund amount, Marketing Finance makes the refund. 7.2.12 FOLLOW UP WITH THE CUSTOMERS:
A constant interaction is maintained by corporate marketing personnel as well as Regional Marketing personnel with the customer to book orders.Besides,through interaction a reciprocation system is established in which NALCO personnel give details of metal position, dispatch details, amendments to L/C required, change in the product mix ,etc.from time to time to the customers.
MOU SCHEME FOR FINANCIAL YEAR 2011-12 FOR SALE OF ALUMINIUM METAL IN DOMESTIC MARKET : MEMORANDUM OF UNDERSTANDING 2011-12 1. This memorandum of understanding (MOU) is between M/s………………………… having its registered office at………………………………………….(first part) and M/s National Aluminium Company Limited having its registered office at Plot no.P/1, Nayapalli, Bhubaneswar-751061 and regional office at …………………(second part) and is being signed on………………………………(date). This memorandum of understanding will be governed broadly by the following terms and conditions: 2. M/s……………….. has requested for an Annual MOU quantity of ______MT as per following quarterly break-up. However after review of availability of metal M/s. NALCO has agreed for _______ MT of metal for the period 01-04-2011 to 31-03.2012 as per following quarterly break-up.
3.MOU PERIOD, PRODUCTS & QUANTITY : (a) PERIOD: Financial Year 2011-12 (from 01.04.2011 to 31.03.2012). (b) PRODUCTS COVERED: Aluminium Ingots, T. Ingots, Sows, Billets, Wire rods, Cast Strips and Rolled Products or any other Aluminium Products. (c) Last date for signing MOU: For Annual MOU Scheme: Customers desirous of signing MOU for the whole year shall sign preferably before 15th April 2011. For Quarterly MOU Scheme : Customers desirous of signing MOU for any quarter other than 1st quarter and consecutively from that quarter shall sign preferably before 15 th of the preceding month prior
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to beginning of that (those) quarter(s). For 1st quarter, the last date of signing would be 20th April’2011 (d) ANNUAL MOU Scheme: (i) Customers desirous of signing MOU for the whole year shall be covered under this scheme. Their signed annual MOU quantity shall be total Annual MOU Quantity agreed by NALCO for FY 2011-12. Minimum Annual MOU quantity shall be 96 MT.
(ii) Quarterly MOU qty: Normally quarterly MOU Quantity shall be Annual MOU quantity divided by 4 (Four) for the quarters defined under sl. no. 2. However,customers signing MOU for the whole year are also allowed for signing differential quarterly quantities within the range of 20% to 30% of Annual signed quantity. (iii) Monthly MOU quantity: Quarterly MOU quantity as mentioned above at sl. no. 3(d) (ii) divided by 3(three). (iv) Customers who sign Annual MOU quantity for the whole year; but do not qualify for annual and loyalty reward by virtue of not meeting eligibility criteria, as per sl.no. 3[III-A] therein may sign MOU afresh for any quarter and consecutively from that quarter. Request from such customers should reach the respective regional offices by 5th of the month following the quarter when they get disqualified. They will be entitled to respective quarterly/monthly benefit afresh but will not be eligible to get the specific benefits available for Annual MOU such as TATKAL SCHEME, Annual Rewards & Loyalty Rewards. (v) The MOU quantities signed by the customers shall be subject to metal availability. Those customers interested in signing MOU for the whole year shall be preferred in signing MOU quantities over other MOU customers [e] QUARTERLY MOU Scheme: (i) Customers desirous of signing Quarterly MOU for any one quarter/any two consecutive quarters/any three consecutive quarters shall be covered under this scheme. Minimum MOU quantity for a quarter shall be 24 MT. Their signed MOU quantity for any one quarter/any two consecutive quarters/any three consecutive quarters shall be total MOU quantity agreed by NALCO considering the metal availability. (ii) Quarterly MOU qty: Total signed MOU quantity equally divided into one quarter/ two quarters/ three quarters, as the case may be. (iii) Monthly MOU qty : Quarterly MOU quantity as mentioned above at sl.no.3(e) (ii) divided by 3(three) for a particular quarter Despatch Priority: MOU Customers: Considering successful MOU customer’s DI issuance date as 1st day incase their turn does not come for dispatch on the 3rd day, then the priority would be in terms of 50% of such DI quantity
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8.0 NALCO's Standard Terms & Conditions Of Sale Format Plant All orders are accepted subject to NATIONAL ALUMINIUM COMPANY LIMITED's (herein- after reoffered to as seller) standard conditions of sale given below. Unless expressly accepted in writing, any qualification to these conditions in a customer's
(hereinafter reoffered to as Buyer) order to anything contrary to or inconsistent with any of these conditions, must be deemed to be and will be treated as inapplicable and of no effect. 8.1 PRICE : 1.1 The prices and other charges for the material shown are ex-factory at NALCO NAGAR prevailing at present. Stockyard expenses will be extra in case of sale from Stockyard. The price are subject to alteration without notice. All material will be invoiced at the seller's prices ruling on date of despatch irrespective of the date of booking or financial arrangements made. 8.1.1 Increase in price due to Government control or action shall be to buyer's account. 8.2 MODE OF PAYMENT/ FINANCIAL ARRANGEMENT: 8.2.1 Payment to be made in advance by demand draft / pay order for full value of material including all taxes (i.e. Excise sales tax etc as application) The same should be drawn in favour of NATIONAL ALUMUNIUM COMPANY LIMITED and should be on a schedule bank in Bhubaneswar or at any other places where our zonal offices are located. Nalco shall separately submit challan /bills for deliveries made against the dispatch instruction covering the offer. The advances paid by buyers will immediately arrange balance pay- ment on demand. 8.2.2 Besides the above, supplies shall also be effected against firm financial arrangement made by the seller in the form of sight L/C and Usance L/C in a formal acceptable by seller. The beneficiary of the L/C shall be National Aluminum Company Ltd , NALCO BHAWAN, P/1 Nayapalli Bhubaneswar ,751013, and the advising bank shall be State Bank Of India, Nalco Corporation Office Bhubaneswar-751013 Whether arising dir- ectly or indirectly because of delay in delivery nor shall any delay /cancellation in deliv- ery , entitle the buyer to refuse to accept any material. 8.2.3 Any terms of Payment agreed to the contrary are valid when specifically indicted in the enquiry response form by Seller.
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II.EXCISE DUTY, SALES TAX, & OTHER TAXES & LEVIES: a) Excise duty shall be charged at the rate as prevailing on the date of despatch. Any variation in the rate due to governmental action shall be to Buyer's account.
b) Sales Tax: Shall be charged at the rates as may be applicable at the time of actual despatch/delivery of materials. The Seller's sales tax registration numbers are as under: i) Central Sales Tax(CST) : BHC 1113, Dtd.16.09.1981 ii) Orissa Sales Tax (OST) : DL 1680, Dtd. 20.05.1982 c) Other taxes and levies: As imposed by Central or Local Government or any other public authority shall be to the Buyer's account. d) Entry Tax and Octroi: As legally applicable at the point of delivery of materials is to the Buyer's account. III. DELIVERY : 1. Orders are accepted and executed subject to "Force Majeure" circumstances including Acts of God in the events of stoppage of work in any establishment of the sellers during the delivery period owing to war, riot,strikes, lock-outs. Trade disputes, breakdowns, fire, tempest, Government Orders, restrictions imposed by the Govt. of India, Government decree, shortage of raw-materials and/or any causes beyond the control of the seller or in the event of any stoppage of Railways or other carriers, deliveries may be postponed or partially or wholly cancelled by the Seller. The Seller will not be liable for any damages or compensation on this account or disruptions. This is without prejudice to the Seller's right to recover money owing to the Seller in respect of deliveries made prior to the commencement of such contigencies. 2. Liquidated Damages clause is not acceptable to seller. 3. Any time or date named by the Seller for delivery is given and intended only as an estimate. The Seller shall not be liable to make good any damage, whether arising directly or indirectly because of delay in delivery, entitle the buyer to refuse to accept any material.
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4 .the seller has the right to supply ten percent more or less than the quality ordered and price payable by the buyer being adjusted accordingly to the quality actually supplied.
5. Goods (returned to the seller within 30 days from the date of dispatch from the seller ‘s factory) and accepted by the seller as defective will be either replaced as originally ordered or full credit shall be allowed for such portion, but shall not form the subject of any claim on account of work done upon the goods, transport CST, loss of profits or any other claim suffered through resale or any other loss damage or expenses whatso- ever. No claim for replacement of material on the ground of quality will be entertained unless made within 14 days of receipt of such material. It may be noted that where replacement is made the same shall be done on the prevailing rates of prices statutory duties and differential, if any and shall be to the buyer’s account. 6 . Each delivery made against an order shall be deemed to be completed and separate for all-purpose. 7. If after goods are ready for delivery or dispatch, the buyer do not take delivery within the stipulated time, the cost of shortage, demurrage and insurance pending dispatch or delivery shall be to the buyer’s account.
IV. CANCELLATION/SUSPENSION /MODIFICATION OF ORDER: No cancellation, suspension or modification of orders by the buyers can be accepted unless special circumstances exists, where the seller’s prior agreement in writing is given and on the express condition that full payment will be made for all work done or expenses incurred prior to our acceptance or cancellation or suspension .The seller’s decision as to such charges shall be final and binding on the buyers. V. INSPECTION: Testing and inspection when mutually agreed between seller and buyers or his agents shall be at the seller’s work and seller’s decision shall be the final. 1. No guarantee, express or implied is given that the material. Supplied is suitable for use under any specific condition or for any specific purpose although such condition or Page2
such purpose may be known to the seller nor is any guarantee given as to the life or wear of the materials.All materials will conform to the seller's standard manufacturing tolerance.
b) The contract shall govern and construe according to the laws in India. VI.PAYMENT-TERMS 1.Term of payment as indicated is binding on the Buyer. Title of goods shall remain with the Seller untill full payment is received from the Buyer on account of goods sold. 2. Should default be made by the Buyer in paying any sum due under any order as and when it becomes due, the Seller shall have the right either to suspend all further deliveries as regards the order in respect of which the default occurred or any other order untill the default be made good or (and notwithstanding that the Seller may have exercised the right to suspend all further delivery) to cancell the orders so far as any further goods remain undelivered. The seller shall also have the right to cancell any other order he may have in hand from the buyers such right of cancellation being in addition to and not in substitution for all other rights and remedies the seller may have against the buyer in consequence of the default. 3. The interest for the interest bearing credit period will be charged at NALCO's rate prevailing on date of despatch. 4. If the Buyer shall default in or commit any breach of any of their obligations to the Seller or if any distress of execution shall be levied upon the Buyer, his property or assets if the Buyer shall make or offer to make an arrangement or composition with creditors, or commit any act of bankruptcy or if any petition or receiving order in bankruptcy shall be present or made against him, or if the Buyer shall be Limited Company and any resolution or petition to wind up such Company's business shall be passed or presented or if a Receiver of such Company's undertaking, property or assets or any part thereof shall be appointed , the Seller shall have the right forthwith to determine any order then subsisting and upon written notice of such determination being posted by him to Buyers last known address any and every subsisting order shall be deemed to have been cancelled without to prejudice to any claim or right the Seller might otherwise make or exercise. 5. The Buyer shall be held responsible for all expenses, loss, damages or any other expenses, whatsoever incurred by the seller due to the failure on the part of the buyer to clear the documents forwarded through bank or take delivery of the goods from the carriers or failure to perform any of the terms of the orders.
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VII.JURISDICTION/GOVERNINGLAWS: All disputes arising out of the contract shall be subject to the exclusive jurisdiction of Courts of Bhubaneswar, Orissa only. The contract shall govern and construe according to the laws in India.
VIII. ARBITRATION
In case of any disputes or differences arising out of the contracts which cannot be resolved mutually between Nalco & Buyers is shall be referred to a sole Arbitrator to be appointed by the CMD of NALCO. The CMD, NALCO shall communicate, cause to be communicated, a panel of three names of persons. To BUYERS in this regards within thirty days of notice for Arbitration, for BUYER to select anyone of them to be appointed. As the Arbitrator. The Arbitrator shall be giving a reasoned and speaking award. The award of the Arbitrator shall be binding on both the parties. The venue of arbitration shall be at Bhubaneswar. In case of any vacancy another arbitration will be appointed in the same manner as above. The provision of the Indian arbitration act and the Rules made thereunder shall apply to the proceedings.
9.0 PRICING PROCEDURE OF NALCO,INDIA
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The pricing committee of Nalco(domestic),fix the price of all the products according to the demand & supply of market, prevailing LME price, Exchange rate, Inventory status of NALCO,Govt. Policy (Tax, Duty) along with all the term & conditions of company.
CMD (Chairman-cum-Managing Director) is authorized to make appropriate changes in the sale of the company’s products as and when necessary based on the recommendation of pricing committee to be constituted by CMD consisting of senior officers who would review the market situation periodically and put it recommendations for approval. CMD has constituted a pricing committee, consisting the following officer : 1. 2. 3. 4.
Executive Director (Marketing) General Manager (Marketing) Dy.General Manager (Marketing-Finance) Dy General Manager (Marketing-Domestic)
Demand supply trend in domestic market, inventory holding ,LME price trend and other factors with the all term & conditions. Based on the approval of Chairman-cumManaging Director, the price & term & conditions, is put up to board for its kind information.the review is made by the committee generally at about 4 weeks interval. The pricing policy is applicable to all the customers.special considerations are some times made for public sector undertakings (PSUs)/Govt./State Undertakings.In the case of PSU units,whenever NALCO is asked to offer matching discount, the same may be scrutinized dependingon the volume of order,the inventory holding,quantum of discount requested for and the financial implications involved.The discount may Cash discount,Flat discount,Special discounts and monthly graded quqntity discounts are also offered to attract customers. Price can be change in case of any abnormal change in market suitations,change in Govt.policy or any Internal problem occurred in the company..
10.0 DISTRIBUTION PROCEDURE AT NALCO (RAW MATERIAL & PRODUCT DISTRIBUTED THROUGH CHANNEL’S IN NALCO IN FOLLOWING SYSTEMS.)
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Bauxite mined from Panchamali hill at koraput.
Transportation through 14.6 km long cable belt.
Alumina refinery at Damanjodi. Here bauxide ore converts to Alumina Transportation Through train Aluminum smelting at Anugul Here alumina converts into aluminum & Alumina converted into ingot.rod,billet. Transport through truck & Railway. Stockyards Jaipur, Visakhapatnam, Banglore, Silvasa, Bhiwandi, Kolkota Transport through rail, truck & ship
Sell the products Both in domestic and export.
11.0. EXPORT PROCEDURE 0F NALCO: NALCO,in 1981, as a public sector enterprise of the government of India, National Aluminium Company (NALCO) is Asia’s largest integrated aluminium complex,encompassing bauxite mining alumina refining, aluminium smelting and casting, power generation, rail and port Page2
operations.
Commissioned during 1985-87 under extremely difficult logistics of project management that too without time or cost over-runs, Nalco has emerged to be a star performer in production and export of alumina and more significantly, in propelling self-sustained growth. It is the first Indian company to be registered with the London Metal Exchange and has ISO 9000-2001, ISO14001 and ISO 9001, certifications for all its units including mines,alumina refinery, aluminium smelter and power plant. Nalco products are exported to more than 30 countries. EXPORT OF METAL : Nalco started exports of Aluminum metal in September 1988. The company’s metal was registered with the London Metal Exchange (LME),London in 1989. The company presently exports primary aluminum in the form of Ingots, Sows-Ingots &.Billets. The Ingots and Sows that are exported are normally of LME grade i.e. conforming to the specification: P1070A pct min, Fe.0.20 pct max and Si 0.10 pct max. Export of others products, such as Wire Rods ,Billets etc., have been done in the past and could be considered in future depending on the market situation and availability of products of required quality. Nalco presently exports through the sea-ports in Kolkata,Paradip & Vishakhapatnam and through land to Bangladesh, All export are on FOB ST (Spout Trimmed) & CIF basis (Custom,Insurance & Fright ) REGISTRATION OF CUSTOMER Registration of customer is done by NALCO in order to enable them to participate in the limited Tenders floted from time to tme..such registration continues to be an ongoing process for Page2
expantion on customer based.
1. Only overseas buyers having sound financial credentials,certified by their bank & business credentionl & experiences in inter national trading are eligiable to apply for registion. 2. The annual tern over of the buyers should not be less then USD 6.0 millions or equivalent. 3. In case of menufacture i.e Direct & User,the above cratirea could be relexed ORDER BOOKING: Order booking acctivites of metal is done through the process of, ► LIMITED TENDERING 1.Based on thetarget, order booking position,metal availability LME price and prevelling domestic market,proposal for floating the tender is iniciated and open approval by competent authority,the tender is floated 2. LME cash settlement price of a quotational period(QP).the premium could very dependind upon the market perception of bidder & could some time be also negative.the QP could be month prior to the month of scheduled shipment or few days,depending on the shipment schedule.The average LME case settlement price would unknown both to the buyers & sellers. ►ONE-TO ONE CONTRACTS One-one contract shall eithers be on LME links basics or on fixed price basics. LME linked basics : price are computed by adding the premium or discount finalized the contract,to the average LME case settlement price of a Quotional period. Fixed price basics : Depending upon the market buoyancy inventories,holding & the LME trends,contracts could be made at fix price by striking the price considering the flachuating trend of LME with reference REUTERS LME screen price at that point of time and date.. ►PARTICIPATION IN GLOBAL TENDERS For participation of global tenders issued by Various overseas customer the department may first study the tender requirement & obtained conformation from plant regarding
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production/availability of required quantity & quality of the materials as per buyers sehedule. SALE ORDER: ► Material description ► Quantity ►Shipment schedule
► Delivery basis ► Price ► Mutational period ( in case of lame linked contracts ) ► Payment terms ► Standard terms and conditions ► Name & addressee of advising/ negotiating ban DISPATCH INSTRUCTION Based on the on going contract the matel planning,finalized during the monthly meeting between corporate marketing & smelter production, and taking in to account metal movement to different to different port,a dispatch instruction should be send to smelter dispatch during the beginning of every month. LETTER OF CREDIT The export of aluminium metal would be done against the irrevocable Letter of The Credit at sight open by a first class international bank acceptable at NALCO having provision for TT reimbursement with in two or three working days of receipt of tested message from the negociating bank. RAKE DISPATCH DOCUMENTS : [A] APPLICATION FOR REMOVAL OF EXCISABLE GOODS FOR EXPORT (ARE-1 FORM) [B] PACKING LIST
RESHEDULING : All possiable effort may be made both by the buyers and seller so that the goods are sheet as per the schedule of contract.if due to any circumstance the seller approaches the buyer for reseheduling of the cargo.
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12,0 CUSTOMER SATISFACTION OF NALCO The very success of any enterprise depends largely on its ability to satisfy and retain their customers. Any business without a focus on customer satisfaction is at the mercy of the market. Without loyal customers eventually a competitor will take away your customers and your customer retention rate will decrease. A successful enterprise knows very well what the key drivers of satisfaction are, the areas that will have the greatest impact in improving customer’s overall perception of our service. Best practice companies also monitor customer feedbacks over time and communicate a strong message about their commitment to serve their customer. A s p e r t h e m a r k e t i n g c o n c e p t , a f i r m c a n r e a l i z e
a l l i t s b u s i n e s s g o a l s b y g e n e r a t i n g c u s t o m e r satisfaction. The idea may sound somewhat utopian. In reality, it is an eminently workable proposition. The satisfaction is a function of perceived performance and expectations. If the performance falls short of expectations , the customer is dissatisfied. If the performance matches the expectations , the customer is satisfied. If the performance exceeds the expectations, the customer is highly delighted. Many companies aim for high customer satisfaction, because the customers who are just satisfied find it better to switch to other companies when a better offer comes along. Those who are highly satisfied are much less ready to switch. High satisfaction or delight creates an emotional bonding with the brand. The result is high customer loyalty. Xerox’s senior management believes that a very satisfied or delighted customer is worth ten times as much to the company as a satisfied customer. A very satisfied customer is likely to stay with Xerox many more years and buy more than a satisfied customer will. Benefits of Measuring Customer Satisfaction • Learning strategies for improving services • Learning customer expectations • Identifying common reasons for customer dissatisfaction • Improving customer retention • Making customers feel valued • Uncovering missed opportunities to demonstrate your capacity to solve problems and win back customer’s confidence • Improved competitive position • Helping to decide where best to spend improvement dollars to make sure you spend it where it matters the most.
Major Customers of NALCO ( Domestic)
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NALCO plays a vital role in the Indian Aluminium industry. The Aluminium producing capacity of the country has witnessed a quantum jump after the entry of NALCO. Through its quality products it gets about 800 direct reputed customers and some of them are cited below: • JINDAL ALUMINIUM LTD • NATIONAL SMALL INDUSTRIES CORPORATION
• HINDUSTAN SEALS LTD • BAJAJ AUTO LTD • GOETZE INDIA LTD • TATA MOTORS LTD • GANGA JAMUNA LTD • HIREN ALUMINIUM LTD • STERLITE INDUSTRIES LTD • METAL POWER COMPANY LTD • SUNDARAM CLAYTON LTD • INDIA PISTONS LTD • ORDNANCE FACTORY AMBAJHARI • HINDUSTAN AERONAUTICS LTD • BHILAI STEEL PLANT • ROURKELA STEEL PLANT • VISAKHAPATNAM STEEL PLANT • BOKARO STEEL PLANT
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Customer Satisfaction Strategy Overview When we talk about customer service or satisfaction, we talk about creativity. It allows us to handle or diffuse problems at hand or later on in the process of conducting everyday business. We talk about how or rather what the organization has to do to gain not only the sale but also the loyalty of the customer. He wants to know the pay of the transaction both in the short and long term. We want to know what the customer wants; we want to know if our customers are satisfied. Satisfaction of course means that what we delivered to the customer met his / her approval. We want to know if the customer is delighted and is willing to come back.
Measuring customer satisfaction is a sound business strategy because: • It is expensive to win new customers and customer retention is critical for business success. • It is less expensive to sell additional products and services to existing, satisfied customers. • Problems encountered by customers negatively impact their loyalty; if we disappoint them they may start looking for alternatives. • The customer contact centre has significant impact on customer loyalty, and in many businesses the call centre has more contact with the customer than any other part of the business. • Most customers will not take the initiative to complain; they will not tell you, they will tell their friends and co-workers how good or bad you were. • “Word of Mouth” is the best and the least expensive way of advertising and customers are much more likely to tell others about negative experiences than positive experiences.
Tools For Tracking Customer Satisfaction Strategy Customer satisfaction surveys: Studies show that although customers are dissatisfied with one out of every four purchases, less than five percent will complain. Most customers will buy less or switch suppliers. Responsive companies measure customer satisfaction directly by including periodic surveys. While collecting customer satisfaction data, it is also useful to ask additional question to measure repurchase intention and to measure the likelihood or willingness to recommend the company and brand to others. Complaint & Suggestion System: A customer-centered organization makes it easy for customers to register suggestions and complaints .Some customer-centered companies establish hotlines with toll free numbers. Companies are also using websites and e-mails for quick two-way communication Ghost Shopping: Companies can have people to pose as potential buyers to report on strong and weak points experienced in buying the company’s and competitor’s products. These mystery shoppers can even test how the the company’s sales personnel handle various situations.
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Customer Complaints When you receive a customer complaint, you know exactly where you stand with the customer. This is especially true if the organization broadly interprets “customer complaints” as any negative feedback that the organization receives. Whether the complaint is justified or not is irrelevant; perception becomes the customer’s reality. But trouble starts when organizations rely on customer complaints as their jointly gauge of customer perceptions. The weakness inherent in relying solely on complaints is two fold. First, many dissatisfied
customers simply do not bother to complain. They have decided that it is not worth the time and effort for them to communicate the problem. In fact, they might just decide that it is not worth the risk of placing another order. The organization might lose a customer and not even under stand what went wrong. And it is much more expensive to regain a customer that to retain one. Second, complaints, by definition provide only negative feedback. An organization cannot understand the full range of customer perceptions based on negative feedback alone. A system for gathering customer perceptions should present a balanced picture of where the organization stands, which does not happen when customer complaints are isolated from other aspects of customer relations. That being said, customer complaints can be an effective part of an overall system for gathering data on customer perceptions. The trick is to pair this method with at least one other, the combination of which will give an organization a more accurate view of its status in customers’ minds. Two specific types of complaints can be especially useful in maintaining an organization’s success repeat complaints (eg. Complaints about the same product, for the same reason or from the same customer) and complaints that pose significant risk to the organization. Analysis of complaint data can identify these phenomena, and management can then take appropriate action on the underlying issues. In these cases, the complaint system becomes a critical survival barometer for the organization. When complaints are not promptly resolved, frustrated customers seek redress in different agencies or at different parts or levels of the same agency, resulting in duplicate effort and compounding costs. There are costs associated with a poor complaint system and there are benefits associated with a good one. Studies have shown that handling customer complaints well can be a critical part of a turn around strategy. If a complaint is handled well, it sustains and strengthens customer loyalty and the company’s image as a leader. It also tells the customer that the company cares and can improve because of their contact. In government agencies, it promotes public confidence in government services. Customer complaints strategies also represent valuable information about recurrent problems. They can point the way to understanding the root causes of customer problems. Customer Satisfaction Index
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Customer Satisfaction Indicator (CSI) is an indicator of customer satisfaction on different aspects of p r o d u c t s a n d s e r v i c e s o f f e r e d b y N A L C O . T h i s f e e d b a c k h e l p s N A L C O t o t a k e v a r i o u s c o r r e c t i v e measures to enhance customer satisfaction level in order to retain send expand NALCO’s customer base.CSI of each customer in each product category is arrived at by the following method Initial Calculation of Weight age: Regional Offices and Corporate Marketing Department calculate the average weight age of each value category / factor based on feedback received from their respective segment of customers. The final average weight age for each value category factor, product segment-wise is calculated by corporate marketing department taking into consideration the weight age of each value category / factor calculated by the zonal offices and corporate marketing department... The final average weights is of different value categories / factor for various product segments are calculated t h r o u g h f e e d b a c k f r o m t h e customers.
Determination Of CSI: Feedback from customers is obtained on regular basis twice a year i.e. June / July and December /January for the half year ending June and December. The feedback form, analysis and review of CSI, rating obtained in respect of value categories / factors are carried out by respective Regional Offices / Corporate Marketing. Based on the finalized weight structure so arrived for each value category / factor product wise and quality rating obtained from the customers for each product, the CSI is computed for each customer in respect of each product.CSI of each customer in each product category .(The ratings are in the scales of 1 to 10.) CSI = ∑ (w * r) / ∑ (w*10) Where, w = weight of value categories / factors r = rating of value categories / factors Thus, CSI is expressed as fraction. Respective in charge marketing of regions reviews the CSI and quality rating obtained from the customer. If the index is found to be low , specific interaction is made with the concerned customer. The concerned agencies and the plant personnel then take it up so that suitable corrective action is taken to improve the same. T h e r e s p e c t i v e i n c h a r g e m a r k e t i n g o f r e g i o n s g i v e p e r i o d i c f e e d b a c k t o t h e c o r p o r a t e M a r k e t i n g regarding the CSI, rating of the value categories / factors, corrective actions taken and the effect of the s a m e . C o r p o r a t e M a r k e t i n g r e v i e w s t h e p r o c e s s o n q u a r t e r l y b a s i s a n d p r o v i d e f e e d b a c k t o E D (Marketing ). ED ( Marketing ), thereafter, reviews the entire process on quarterly basis and takes suitable corrective action for improving the effectiveness of the same . Trend analysis, Histograms and other statistical analysis tools are used for analysis and review, as necessary , from time to time.
13.0. Promotional procedure of NALCO,India : Basically NALCO is not spending it’s money in Various Advertising & promotional activities, rather it spends money for the development of people as well as the development of society.
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Corpotate social responsibility of NALCO,India : At Nalco, when we started our activities in Orissa 30 years ago, there was no such nomenclature like Corporate Social Responsibility or CSR. All that we knew was our Moral Responsibility towards the society. But today, CSR has become a buzzword in the corporate world. More and more organizations are
waking up to this belated realization that beyond productivity and profitability, it is the social accountability that determines their image. Presently, even before the land is acquired and foundation-stone laid for a project, the company launches its CSR activities in the area. It is presumed that on a solid CSR foundation, a strong business empire can be built. As a policy, Nalco has been allocating 1% of its net profit of the year for periphery development activities of the succeeding year Out of this allocable fund: 40% is for Damanjodi sector, where the company’s Mines & Refinery are located; 40% is for An gul sector, where the company’s Smelter & Power Plant are located; and 20% is for other areas. ● Mobile medical units of Nalco visit peripheral villages in Angul and Damanjodi sectors and hold health camps round the year, distributing free medicines. ● To foster scientific temper among rural students, Nalco takes them to Bhubaneswar and shows them Pathani Samant Planetarium, Regional Museum of Natural History and Regional Science Centre ● Soon after the Super Cyclone in Orissa in the year 1999, Nalco has constructed 197 Primary Schools-cum-Cyclone Shelters, under Prime Minister's National Relief Fund Scheme. ●1999: To National Defence Fund during Kargil War Rs.1.18 Cr 1999 For the victims of Super Cyclone in Orissa
Rs.1.39 Cr
● 2001: To PM's National Relief Fund for the victims of Gujarat Earthquake Rs.1.70 Cr ● 2004: To Sports Authority of India towards training of Indian Contingent for Athens Olympics Rs.1.00 Cr
● 2005: To PM's National Relief Fund for the victims of Tsunami Rs.2.44 Cr ●2005: To PM's National Relief Fund for the victims of J&K Earthquake Rs.2.98 Cr
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● 2008: To Chief Minister Relief Fund for the victims of Flood in Orissa Rs.5.00 Cr
14.0 Suggestions No body in this world is perfect. Every body needs a feedback/suggestion for their development. NALCO is not an exception. So, in spite of many good things there are still areas where Nalco could improve more. Like as a public sector it’s decision making process is a bit slow. Here the organization should think to make it faster to compete with the competitors especially from private sectors. Coal and electricity one of the must needed resources for the organization. As coal is a natural resources and now a days its amount is decreasing so, company should think about alternatives.where as NALCO has been already allocated Utkal-E coal blog,Orissa,for its expansion unit. Even the project was allocated but still it not work properly.if NALCO will work in this project as soon as possible it would have an extera advantage to the company and company may add another new product. Regarding electricity NALCO has signed a MOU with NTCIL (Nuclear Power Corporation of India) for setting of Nuclear power plant in India. In joint venture for generating and selling electric power, If this project will exercise in time then NALCO can play a pivotal role in the power market. NALCO’s market share it has good position in its primary segment but it should modify its product mix which will help itself to gain a good position other than primary product segment. As NALCO is a quite old organization, it needs some technological improvement also. As NALCO is a cash reserve organization so the company has the opportunity to expand its business in different segments. As now the global economic recession has affected world business very deeply. So, the company should be always prepared to face such kind of satiation in future. In our report we have seen almost all of the NALCO’s products are in cash cow segment, accept T-ingots, here company has some areas of improvement and they should be observed keenly.
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15.0 Conclusion Jules Verne, the father of modern science fiction, wrote "From Earth to the Moon", describing a manned trip to the moon over 100 years before the Apollo landings. The protagonists' space craft is to be fired from a giant gun and they decide there is one material which is ideally suited to the application - aluminium: "This valuable metal possesses the whiteness of silver, the indestructibility of gold, the tenacity of iron, the fusibility of copper, the lightness of glass.
It is easily wrought, is very widely distributed, forming the base of most of the rocks, is three times lighter than iron, and seems to have been created for the express purpose of furnishing us with the material for our projectile." Aluminium industry in general and NALCO in particular have very bright future. It is quite sure that NALCO will prove it’s worth and cement a good position for itself in near future. Proper identifications of new business opportunity in the international market can help it gain it’s market share. It has already taken the required measures for this purpose. All its expansion program are the vital examples of achieving its goal of securing a good status at the international level. Hence the strategy part of Nalco will defiantly play a vital role in its goal achieving process. So, we hope this project will help full in order to increase its reputation as well as also to fulfill the demands of the customers.
16.0.BIBLOGRAPHY Kotler, P. (Year). Marketing Management. New Delhi: Publisher. Marketing Management – Arun Sharma
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Annual report of NALCO (Month, Year). Publisher. Parichaya
www.google.co.in (Write the exact link with access date) www.netmba.com www.wikipedia.com www.nalcoindia.com www.moneycontrol.com
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QUESTIONNAIRE 1. Rank the following strengths of Nalco as per your preference as per the scale(Scale 1-5, 1=Most,5=Least) A. Lost cost pricing B. Fully integrated operation C. Brand name D. Technology E. If any other 2. Whether being a public sector is strength for Nalco? A. Yes B. No
3. Whether Nalco’s conservative policy like debt-free company is weakness for the company? A. Yes B. No 4. Nalco being a Govt. Undertaking does it have low flexibility in operation? A. Yes
B. No
5. Whether having a product mix consisting of only primary product a weakness of Nalco? A. Yes
B. No
6. Does Nalco need new updated technology? A. Yes
B. No
7. Being mainly an export oriented company, does it create any strength or weakness for Nalco? (Please Tick) A. Strength B. Weakness 8. Among the following points rank the best opportunity for Nalco? A. India being the second fastest growing economic in the world even within the global crisis provides opportunity for growth. B. Rich geological reserve base of Bauxite in India C. Lower labor and cost of production in India. D. Growing demand for Housing and booming Retail Sector. E. Automobile Consumer durables & engineering sector are at very nascent as per the global scale. F. If any Other. Page2
(Rank them in a scale of 1-5, 1=Most seems to be…. 5= Least seems to be) 9. According to current scenario rank the most important threat for Nalco?
A. Growing competitors B. Instability in Aluminum price C. External Environment D. Close substitute for aluminum E. Reduction in Aluminum import tariff 10. Specify any other strength of Nalco ------------------------------11. Could we visualize Nalco as the leader in its sector in the coming 10 years. A. Yes
B. No
If yes, please give at least 2 reasons. 1.
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2.
