Question

 Consumer & Office (15% of sales)[4]: Stationary; Office; Home Care; Protection; Construction; Home Improvement; Visual Systems

Business Strategy and Analysis
As an individual in your group, you analyze the business strategy and analysis (Ch 3-7) of the individual business (i.e. division/ subsidiary/ business unit).
Individual component of your project should revolve around:
Conduct an external analysis (e.g. PESTEL, 5 Forces model, Strategic Group Mapping) (Ch 3) and internal analysis (e.g. VRIO, Isolating mechanisms, Dynamic capability) (Ch 4)
How does the individual business perform? (Ch 5)
What business strategies (e.g. Differentiation/ Cost-Leadership/ Blue Ocean Strategy) does it pursue? (Ch 6)
What stage of the industry lifecycle/ Crossing the Chasm is the industry in? What types of innovations (4 Types/ Open vs Closed) does the individual business have? (Ch 7)

Answer 1

Home Improvement- Green Buildings- Tata Housing:

PESTEL Analysis-

Political-

Government Support- Many Indian state governments are now making the standards of “greenness” mandatory. Some governments are even providing incentives, for example, exemptions on property tax, to green buildings.

Economical-

Perception of cost among consumers-

                Higher premium (3%-5%) seems to be involved
                A general misconception that only high technologies and expensive techniques are associated with green buildings

Social-

Lack of awareness among Indian people-

                                A large challenge towards widespread acceptance of the concept
                                Lack of right and accurate information regarding advantages and usefulness of green buildings
                                Marketing efforts involved does not have the intended effect
                               The occupancy rate has been so far less than ideal

Technological-

Lack of interest by local builders in India- The local builders in India do lack interest in learning new technologies such as computer aided simulations and tools, which slows down the whole process.

Environmental-

Lack of educational awareness on environmental issues- The merits of building energy efficient houses and constructions are known only to limited amount of people in India, generally to people involved in this business. There is still a high need to bring awareness to common man.

Legal-

Below rules and procedures need to be strictly followed-

Unique Green Building Evaluation Standards (GBES)- the predefined three primary Rating systems in India:

1. Green Rating for Integrated Habitat Assessment (GRIHA). GRIHA rating system consists of 34 criteria categorised in four different sections
2. Indian Green Building Council (IGBC). Following Green Building rating systems are available under IGBC -

LEED India for New Construction

LEED India for Core and Shell

IGBC Green Homes

IGBC Green Factory Building

IGBC Green SEZ

IGBC Green Townships

Business Performance-

The company is working on following parameters and performing superbly-

• Identifying which markets to serve: Geographically- Urban and Semi-urban areas
• Identify which products to offer: Incorporate Green solutions like Solid waste & Waste water Management, star rated energy efficient appliances like AC, Lighting design, Solar panel/ heater installations, Ventilation to reduce Green House Gases emissions, Aesthetics, Building envelope (roof, ceiling, windows for insulation), high performance glass, reflective paints,
• Determining the right target market segment based on Segment Size, Segment growth, Profitability, Current and potential Competition.
• Targeting Demographically- rising middle class and upper class, more educated people

Business Strategy & Analysis-

The concept of Green Building is more famous among the affluent class people of India, Elite professionals and Business men. Green buildings have long term benefits like reduction in energy consumption, water wastage, carbon emissions, and improved air quality in the house, adequate day lighting leading to a healthy life and a substantial cost savings in the long term. Hence, these high-end customers are becoming more interested in these green buildings due to its eco-friendly benefits or as an investment for the future. Customers do also show a sense of responsibility towards the nature and hence are curious to know about the benefits of these eco-friendly buildings. Market demand is not just growing in India, but is also growing across the globe as sense of responsibility towards eco system or as an investment which saves long term operational costs.

Although there are factors like Government policies, high initial investment, lack of skilled labor and contractor, high operations and maintenance problems, but demand in the market seems to be positive and more and more green building projects are to be launched in India.

These green buildings are value for money; hence, eco sensitivity, education and income level of the consumers seem to the dominant factors determining the purchasing capability and purchase behavior of the potential consumers.

Stage of the industry lifecycle-

Industry is at Growth Stage. Although, costs of these Green building have come down, still it remains higher than a conventional building and it could become challenging to sell the solution to the common people. Bottom line-Yield still needs to be focussed upon in order to reduce costs at initial level. Indian economic situation- Some downfalls have been observed in the construction business in the past as Indian economy has tended to fall over the passage of the time. Frequent competition from high-tech European and U.S. countries for getting into Indian market with products and solutions- The clean energy sector is currently an attractive and profitable sector in India.

For Corporates, ‘Sustainability’ via Eco friendly initiatives or promoting/selling green products is the new key word towards successful business, a way to create a brand image among the consumers and a differentiating factor in today’s cut throat competition. It is a disruptive innovation for the society. Therefore, Green Buildings are in demand and offer cost-effective opportunity for savings as they also are capable of generating energy, thus leading to ‘Zero Energy’.