Submitted By : J Karthik Ganesh
Program : EPGP
Class :Sep 2009
1. Discuss how your company has attempted to develop a competitive strategy to protect its business level strategy. For example, if your company is operating in an embryonic industry, discuss the ways it has attempted to increase its competitive advantage overtime. If it operates in a mature industry, discuss how it has tried to manage the five forces of industry competition.
L&T being in a infrastructure industry which is in growth stages in India. L&T Has developed a competitive strategy to protect its business level strategy by concentrating in building block of distinctive competencies. It has a strategy of being first in innovate process that leads to increase the ease of production, increase the quality and reduce the cost of production.
It has a strategy of Excel in Quality of Production and adopted many international standards in process as well as product. Also created Quality cell for continual improvement in the system.
It has a strategy of faster Delivery i.e execute the project as Quick as possible by deploying more resource and also increase the efficiency of resources deployed so that can have lesser Customer Responsive Time.
It has a strategy of automate every value chain process by implementing superior available technology. and implemented this in supply chain management process so that all the process is automated by information technology including its supplier uses this to increase the efficiency.
L&T has managed the five force of industrial competition by the following
Risk of Potential competitor :-
a) Economy of Scale
Production cost can not be reduced by mass production because quantity is freezed and most of the projects are bided in public. price reduction is possible with superior management of operation gained through experience which the new entrant can not do because they have no previous local market experience. This is an oppoutunity.
L&T capitalize this opportunity by efficient operation management and innovation. b) Brand Loyalty
L&T Tackle this problem by up keeping their quality and adopting international standards which the local player does not currently adopting to attract the MNC Clients.
c) Switching cost
Switch cost is very less in the industry, customer can switch between the companies . almost there wont be any switching cost at all. This is an threat to companies. L&T Tackle this threat by Differentiating themselves from other player by Faster Execution with low price, with Superior Customer relationship.
d) Govt Regulation
Recent FDI Norms in infrastructure industries allows Foreign institution to have Joint venture with Indian Local Players. This is an Thread to L&T.
L&T Has no plan to tackle this problem , since this is related to Govt Decision
Rivalry Among Established Companies
a) Industry Competitive Structure
Industry is fragmented industry has many small , mid sized local player. This is an threat to L&T.
L&T Tackle this threat by concentrating on Bigger Projects where only Larger Player can compete with them.
Industry has higher exit barrier , since the industry required High fixed cost for Machineries and Highly Labour intensive industry. Exist will be costlier for the company. This is a Threat to L&T.
L&T has superior Asset management system for acquire , operate and Dispose the same which operates depend upon the industry condition. Also L&T Has Strategies of Shifting the Permanent Employee between the Business Unit and Employs almost temp employment in Unskilled & Unskilled Operations. This Will help L&T to tackle the threat.
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