A GLOBAL / COUNTRY STUDY AND REPORT ON “TATA CONSULATNCY SERVICE Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Faculty Guide Mrs. Dipamala santra Assistant Professor

Submitted by

Patel Bhavesh G. (108000592081) Patel Dipak (108000592064) Patel Ankit (108000592048) Patel Bhavesh.R (108000592011) Patel Bhavendra (10800059027) Patel Chintaben (10800059010) [Batch: 2010-12] MBA SEMESTER IV

Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012

1 ACKNOWLEDGEMENT

It was indeed an opportunity for us to prepare this report conducted for TATA CONSULTANCY SERVICE LTD. Under this project we as students got opportunity to learn the practical aspects of business administration and were able to apply the theoretical knowledge ain practice.

First we want to give thanks to our university, Gujarat technical university and our college, Oxford School of management for giving us the opportunity to take part in this kind of project.

Next we want to give thanks our honble HOD, Mr. Japan Shah for this supports. Last but not least we want to give thanks to all our faculties for timely giving advices.

Preparation of such kind of reports calls for an intellectual nourishment, professional help and encouragement from many quarters. During the preparation of this report many people helped us and we are thankful to all of them

2 PREFACE

The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the Global Country study. GCSR also helps the student to devote his/her skill to analyze the various business opportunities in various countries across the globe, to evaluate them and to provide feasible recommendations on the provided data.

We have selected The Netherlands as the country and We have studied the company HCL Technology.

3 CONTENTS

NO Particular Page no.

1. Introduction 5

2. History 6

3. Role of TCS in the Economy of Netherland 6

4. Structure of TCS 8

5. Function of TCS 7

6. Comparative position of TCS: 9

7 Present Position and Trend of Business 12

8 Policies and Norms of Netherland Including Licensing/ 13 Permission/Taxation 9. Present Trade Barriers for Import and Export 15

10. Potential for Import/Export in India/Gujrat Market 25

11. Business Opportunity in Future 26

12. Conclusions 30

13. Bibliography 31

4 Introduction

Type- Public company

Traded as- BSE: 532540 NSE: TCS BSE SENSEX Constituent

Industry- IT services,

IT consulting Founded 1969

Headquarters - Mumbai, Maharashtra, India

Area served – Worldwide

Key people - Subramaniam Ramadorai (Vice Chairman) N. Chandrasekaran (CEO & MD)

Services- IT, business consulting and outsourcing services

Revenue - 37,928 crore (US$7.57 billion) (2011)[1]

Profit - 9,068 crore (US$1.81 billion) (2011)[1]

Total assets - 25,037 crore (US$4.99 billion) (2011)[1]

Employees - 226,751

5 History

It began as the "Tata Computer Centre", for the company Tata Group whose main business was to provide computer services to other group companies. F C Kohli was the first general manager. J. R. D. Tata was the first chairman, followed by Pankaj Roy.

One of TCS' first assignments was to provide punched card services to a sister concern, Tata Steel (then TISCO). It later bagged the country's first software project, the Inter-Branch Reconciliation System (IBRS) for the Central Bank of India. It also provided bureau services to Unit Trust of India, thus becoming one of the first companies to offer BPO services

Role of TCS in the Economy of Netherland

Now one of the largest IT services companies in the Netherlands, TCS established its European headquarters in Amsterdam in 1992. Many of our service and industry practices are also based in Amsterdam, including CRM, business intelligence, insurance, and banking and financial services.

Today, TCS has more than 1,000 employees working for our Dutch customers, which include some of the Netherlands’ leading and most respected companies, such as KLM, Philips, ABN AMRO, Rabobank and the ING Group.

TCS engages with organizations such as the KennisKring Amsterdam, Platform Outsourcing Nederland and the International Business Forum Amsterdam to work toward making the Netherlands a center of innovation and business excellence.

TCS is also represented on the board of the Netherlands India Chamber of Trade and Commerce, and we actively support the Amsterdam-based Global Reporting Initiative, the globally acknowledged authority on sustainability and sustainability reporting.

6 TCS believes in contributing to the community; our association with Red Cross Netherlands has helped to raise awareness and fund the battle against world poverty and hunger.

Finally, it has actively developed partnerships with various local universities such as Erasmus and Nyenrode University. Through these partnerships, It participates in joint research, guest lectures, white paper development and recruitment

7 Structure of TCS

S.No Name Designation

1 Ratan N Tata Chairman

2 N Chadrasekaran Managing Director

3 Suprakash Mukhopadhyay Company Secretary

4 Phiroz Vandrevala Director

5 Clayton M Christensen Director

6 Aman Mehta Director

7 V Thyagarajan Director

8 Ishaat Hussain Director

9 Cyrus Mistry Director

10 Ron Sommer Director

11 Vijay Kelkar Director

12 O P Bhatt Director

13 Laura M Cha Director

14 S Ramadorai Vice Chairman

15 S Mahalingam Chief Financial Officer & Executive Director

8 Function of TCS

TCS provides the following services in Netherlands:

 IT Services

 IT Infrastructure Services  Enterprise Solutions

 Business Process Outsourcing  Business Intelligence and Performance Management  Engineering and Industrial Services

 TCS Financial Solutions: TCS BaNCS

Industries services provides by TCS

 Banking and Financial Services

 Energy, Resources and Utilities  Government

 Healthcare and Life Sciences  High Technology

 Insurance  Manufacturing

 Retail and Consumer Packaged Goods  Telecom

 Travel, Transportation and Hospitality

9 Product Name Year Month Sales Sales % of Quantity Value(Rs.Million) STO

Document Processing 2012 03 0.00 374535.70 0.00 Systems

InformationTechnology 2012 03 0.00 14052.20 0.00 and Consultancy Services

InformationTechnology 2011 03 0.00 281712.60 96.23 and Consultancy Services

Others 2011 03 0.00 10920.00 3.73

Document Processing 2011 03 6549.00 121.50 0.04 Systems

10 Comparative position of TCS

Company Sales Current Change in P/E ratio Market 52 weeks (rs.million) price % cap (rs high/low million)

Tcs 388585.40 1198.65 0.56 21.50 2359332.05 1279/90

Infosys 312540.00 2358.25 0.00 17.19 1372524.55 3020/216

Wipro 263005.00 407.00 0.80 21.29 997583.59 454/31

Hcl tech 67944.80 505.75 0.91 21.09 353729.44 527/36

Tech 49655.00 699.25 -1.40 15.78 88780.75 798/52 Mahindra

Mahindra 47761.00 75.60 -0.13 20.61 88671.72 94/6 satyam

Patni 21516.66 506.30 0.05 14.41 68826.48 521/25 computer

11

Present Position and Trend of Business

 TCS is the only IT services organization to be a part of ISO 15926 real time interoperability network grid (iRING) Version 1.0.0

 TCS achieves Gold status in Business in the Community's (BitC) Corporate Responsibility Index (CRI) 2007-08.

 Largest IT services firm in Asia.  They are the world’s first organization to achieve an enterprise-wide Maturity Level 5 on both CMMI® and P-CMM®, using the most rigorous assessment methodology - SCAMPISM.

 TCS’ Integrated Quality Management System (iQMS™) integrates process, people and technology maturity through various established frameworks and practices including IEEE, ISO 9001:2000, CMMI, SW-CMM, P-CMM and 6-Sigma.  TCS tops the DataQuest DQTop20 list of IT Services providers in India for 2008

 TCS ranked among Top 25 in Business Week's 2007 Information Technology 100  TCS awarded top position in 2007 'Global Services' 100 ‘Top 10 Best Performing IT Services providers’ category  TCS was awarded the Business Process Outsourcing Service Provider 2011 at the Frost & Sullivan Asia Pacific ICT Awards ceremony hosted in Singapore.

12 Policies and Norms of Netherland Including Licensing/ Permission/Taxation

Political, Administrative and Legal System:

 The Netherlands is a constitutional monarchy and has a parliamentary democracy. The Constitution (1814) is the most important document of state in the Netherlands. It contains the fundamental rules for the political and legal structure of the Netherlands and establishes the fundamental rights of its citizens. It is the highest national law of the state; other laws are required to comply with its provisions.

 Political elections are held every four years. These elections are to the Lower House of Parliament, also called the Senate (Eeerste Kamer), a directly elected assembly of 150 people. The Upper House, also called the House of Representatives (Tweede Kamer), which has 75 members, is elected by the executive bodies of the provincial councils.

 As regards the courts, the Netherlands does not have a jury system. The district courts deal with the majority of civil cases. The courts of law deal with the more important (criminal) cases, while appeals against a judgment of a district court are also heard by the courts of law. Further appeal against a judgment of the courts of law lies with one of the five courts of appeal in the Netherlands.

13 The Tax Structure of Netherland:

Profitability is any company's first priority. Netherlands' corporate tax structure advantageous to achieving business goals.

For centuries, the Netherlands has been a nation of traders. To ensure that this longstanding tradition endures, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands.

The Dutch tax system has a number of features that may be very beneficial in international tax planning.

 Relatively low statutory corporate income tax rate of 25% (20% for first 200,000 Euro)  Possibility of obtaining advance tax rulings from the Dutch tax authorities giving certainty on future tax position  Innovation box resulting in an effective corporate tax rate of 5% for qualifying profits

 R&D allowance for qualifying R&D wage costs (WBSO)  Tax deduction facility for R&D operating costs and investments in R&D assets (RDA)

 Favorable participation exemption regime  Fiscal unity regime providing for a tax consolidation of companies within a group and therefore to freely offsetting profits and losses among group members  Transfer pricing practice in accordance with OECD Transfer Pricing Guidelines and the possibility to obtain an Advance Pricing Agreement (APA) 14  The possibility to carry forward losses for nine years and to carry them backward for one year

 Wide tax treaty network to avoid double taxation and reducing withholding taxes on dividends, interests and royalties (for interest and royalties often to 0%)

 No statutory withholding tax on outgoing interest and royalty payments  Favorable tax treatment for foreign employees (30% tax ruling)

 VAT deferment upon import: no upfront payment of VAT  Dutch Tax Authorities: access to the tax inspector

 Dutch Customs Authorities: practical and pro-active approach

Present Trade Barriers for Import and Export

Types of Non-Tariff Barriers

There are several different variants of division of non-tariff barriers. Some scholars divide between internal taxes, administrative barriers, health and sanitary regulations and government procurement policies. Others divide non-tariff barriers into more categories such as specific limitations on trade, customs and administrative entry procedures, standards, government participation in trade, charges on import, and other categories. We choose traditional classification of non-tariff barriers, according to which they are divided into 3 principal categories.

The first category includes methods to directly import restrictions for protection of certain sectors of national industries: licensing and allocation of import quotas, antidumping and countervailing duties, import deposits, so-called voluntary export restraints, countervailing duties, the system of minimum import prices, etc. Under second category follow methods that are not directly aimed at restricting foreign trade and more related to the administrative bureaucracy, whose actions, however, restrict trade, for example: customs procedures, technical standards and norms, sanitary and veterinary standards, requirements for labeling and packaging,

15 bottling, etc. The third category consists of methods that are not directly aimed at restricting the import or promoting the export, but the effects of which often lead to this result.

The non-tariff barriers can include wide variety of restrictions to trade. Here are some example of the “popular” NTBs.

Licenses

The most common instruments of direct regulation of imports (and sometimes export) are licenses and quotas. Almost all industrialized countries apply these non-tariff methods. The license system requires that a state (through specially authorized office) issues permits for foreign trade transactions of import and export commodities included in the lists of licensed merchandises. Product licensing can take many forms and procedures. The main types of licenses are general license that permits unrestricted importation or exportation of goods included in the lists for a certain period of time; and one-time license for a certain product importer (exporter) to import (or export). One-time license indicates a quantity of goods, its cost, its country of origin (or destination), and in some cases also customs point through which import (or export) of goods should be carried out. The use of licensing systems as an instrument for foreign trade regulation is based on a number of international level standards agreements. In particular, these agreements include some provisions of the General Agreement on Tariffs and Trade and the Agreement on Import Licensing Procedures, concluded under the GATT (GATT).

Quotas

Licensing of foreign trade is closely related to quantitative restrictions – quotas - on imports and exports of certain goods. A quota is a limitation in value or in physical terms, imposed on import and export of certain goods for a certain period of time. This category includes global quotas in respect to specific countries, seasonal quotas, and so-called "voluntary" export restraints. Quantitative controls on foreign trade transactions carried out through one-time license.

Quantitative restriction on imports and exports is a direct administrative form of government regulation of foreign trade. Licenses and quotas limit the independence of enterprises with a

16 regard to entering foreign markets, narrowing the range of countries, which may be entered into transaction for certain commodities, regulate the number and range of goods permitted for import and export. However, the system of licensing and quota imports and exports, establishing firm control over foreign trade in certain goods, in many cases turns out to be more flexible and effective than economic instruments of foreign trade regulation. This can be explained by the fact, that licensing and quota systems are an important instrument of trade regulation of the vast majority of the world.

The consequence of this trade barrier is normally reflected in the consumers’ loss because of higher prices and limited selection of goods as well as in the companies that employ the imported materials in the production process, increasing their costs. An import quota can be unilateral, levied by the country without negotiations with exporting country, and bilateral or multilateral, when it is imposed after negotiations and agreement with exporting country. An export quota is a restricted amount of goods that can leave the country. There are different reasons for imposing of export quota by the country, which can be the guarantee of the supply of the products that are in shortage in the domestic market, manipulation of the prices on the international level, and the control of goods strategically important for the country. In some cases, the importing countries request exporting countries to impose voluntary export restraints.

Agreement on a "voluntary" export restraint

In the past decade, a widespread practice of concluding agreements on the "voluntary" export restrictions and the establishment of import minimum prices imposed by leading Western nations upon weaker in economical or political sense exporters. The specifics of these types of restrictions is the establishment of unconventional techniques when the trade barriers of importing country, are introduced at the border of the exporting and not importing country. Thus, the agreement on "voluntary" export restraints is imposed on the exporter under the threat of sanctions to limit the export of certain goods in the importing country. Similarly, the establishment of minimum import prices should be strictly observed by the exporting firms in contracts with the importers of the country that has set such prices. In the case of reduction of export prices below the minimum level, the importing country imposes anti-dumping duty which

17 could lead to withdrawal from the market. “Voluntary" export agreements affect trade in textiles, footwear, dairy products, consumer electronics, cars, machine tools, etc.

Problems arise when the quotas are distributed between countries, because it is necessary to ensure that products from one country are not diverted in violation of quotas set out in second country. Import quotas are not necessarily designed to protect domestic producers. For example, Japan, maintains quotas on many agricultural products it does not produce. Quotas on imports is a leverage when negotiating the sales of Japanese exports, as well as avoiding excessive dependence on any other country in respect of necessary food, supplies of which may decrease in case of bad weather or political conditions.

Export quotas can be set in order to provide domestic consumers with sufficient stocks of goods at low prices, to prevent the depletion of natural resources, as well as to increase export prices by restricting supply to foreign markets. Such restrictions (through agreements on various types of goods) allow producing countries to use quotas for such commodities as coffee and oil; as the result, prices for these products increased in importing countries.

Quota can be of the following types: 1) Tariff rate quota 2) Global quota 3) Discriminating quota 4) Export quota

Embargo

Embargo is a specific type of quotas prohibiting the trade. As well as quotas, embargoes may be imposed on imports or exports of particular goods, regardless of destination, in respect of certain goods supplied to specific countries, or in respect of all goods shipped to certain countries. Although the embargo is usually introduced for political purposes, the consequences, in essence, could be economic.

Standards

18 Standards take a special place among non-tariff barriers. Countries usually impose standards on classification, labeling and testing of products in order to be able to sell domestic products, but also to block sales of products of foreign manufacture. These standards are sometimes entered under the pretext of protecting the safety and health of local populations.

Administrative and bureaucratic delays at the entrance

Among the methods of non-tariff regulation should be mentioned administrative and bureaucratic delays at the entrance which increase uncertainty and the cost of maintaining inventory.

Import deposits

Another example of foreign trade regulations is import deposits. Import deposits is a form of deposit, which the importer must pay the bank for a definite period of time (non-interest bearing deposit) in an amount equal to all or part of the cost of imported goods.

At the national level, administrative regulation of capital movements is carried out mainly within a framework of bilateral agreements, which include a clear definition of the legal regime, the procedure for the admission of investments and investors. It is determined by mode (fair and equitable, national, most-favored-nation), order of nationalization and compensation, transfer profits and capital repatriation and dispute resolution.

Foreign exchange restrictions and foreign exchange controls

Foreign exchange restrictions and foreign exchange controls occupy a special place among the non-tariff regulatory instruments of foreign economic activity. Foreign exchange restrictions constitute the regulation of transactions of residents and nonresidents with currency and other currency values. Also an important part of the mechanism of control of foreign economic activity is the establishment of the national currency against foreign currencies.

19 The transition from tariffs to non-tariff barriers

One of the reasons why industrialized countries have moved from tariffs to NTBs is the fact that developed countries have sources of income other than tariffs. Historically, in the formation of nation-states, governments had to get funding. They received it through the introduction of tariffs. This explains the fact that most developing countries still rely on tariffs as a way to finance their spending. Developed countries can afford not to depend on tariffs, at the same time developing NTBs as a possible way of international trade regulation. The second reason for the transition to NTBs is that these tariffs can be used to support weak industries or compensation of industries, which have been affected negatively by the reduction of tariffs. The third reason for the popularity of NTBs is the ability of interest groups to influence the process in the absence of opportunities to obtain government support for the tariffs.

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Potential for Import/Export in India/Gujrat Market

The economic needs of the country, effective use of foreign exchange and industrial as well as consumer requirements are the basic factors which influence India's import policy. On the import side the policy has three objectives:

1. to make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology; 2. to simplify and streamline procedures for import licensing; 3. to promote efficient import substitution and self-reliance.

There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a restricted list, but most of the restrictions are on grounds of security, health and environmental protection or because the goods are reserved for production by small and tiny enterprises, which are home-based or village-based and which require low skills and employ a large number of people. But the policy of restricting import of consumer goods is changing.

The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average tariff levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus additional duty of 2%; the average rate is about 30%.

Imports are allowed free of duty for export production under a duty exemption scheme. Input- output norms have been specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed for specified products to be exported.

25 There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand capital goods is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion Capital Goods (EPCG) Scheme under which exporters are allowed to import capital goods (including computer systems) at concessionary customs duty, subject to fulfillment of specified export obligations. Service industries enjoy the facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Software units can use data communication network to export their products.

Business Opportunity in Future

Your Company has performed exceptionally in terms of growth and profitability by capturing opportunities and executing on the ground. Business demand rose steadily through the year and revenues for the financial year grew annually at 24.3% on a consolidated basis to Rs. 37,325 crore ($8.2 billion). During the year, we saw a strong revival in business demand across markets. Demand from customers in developed markets like USA, Europe and Australia continued to recover as did growth from the emerging markets of Asia-Pacific and India. TCS is offering specific solutions using the cloud paradigm in human resource management, procurement, analytics as well as finance and accounting.

The Dutch Economy

The Netherlands is one of the world’s top ten economies in export volume and ranks among the top twenty for GDP, despite being geographically one of the smallest countries in the world.

Gateway to Europe The Netherlands owes its high rankings in large part to its advanced transport infrastructure – with the port of Rotterdam and Schiphol Airport as its hubs – and its highly developed telecoms infrastructure. Rotterdam is Europe’s largest seaport, and the fourth largest in the world in terms of container activity, while Schiphol is western Europe’s fourth largest airport. Together, they

26 have helped build the Netherlands’ reputation as ‘the gateway to Europe’.

Investment from abroad The Netherlands has long been viewed as an attractive investment opportunity. The country offers an excellent entry point to business in the European Union because of its stable and flexible labour market, its central geographical location and excellent infrastructure, its well- educated and multilingual work force and the considerable expertise available here.

Expats Just as many companies decide to set up European operations in the Netherlands, foreign visitors are also often enticed to stay and find jobs and accommodation, particularly since the EU’s internal borders have opened. The Dutch government has introduced tax measures that make it attractive for expats to work here, and bureaucratic requirements have been simplified, making it easier for employers and employees to acquire the right papers.

Randstad After Paris, London and Milan, the Randstad (the conurbation that comprises Amsterdam, The Hague, Rotterdam and Utrecht) is the largest economic urban area in the European Union in GDP terms. This is largely thanks to the strong presence of financial and commercial services, which are key drivers of the Dutch economy.

An open economy is a dependent economy The Netherlands has developed into a well-diversified economy, with strong services and business sectors. The Dutch economy has been a free-market system for the last two decades, with the government actively reducing its role to regulation and taxation. The economy is also characterised by moderate unemployment and a sizeable current account surplus.

However, a range of factors influence its performance. One is the relative significance of trade, which accounts for 60 percent of GDP. This makes the Netherlands – despite the relative resilience of its economy - highly dependent on the health of the wider global economy and therefore susceptible to its fluctuations. Another factor – one that may mitigate the effects of any 27 upswing in the world economy – is the relatively high cost of labour (wages and pension contributions). The global economic downturn adversely affected the Dutch economy, which went into recession in 2009 , contracting by 4 percent. It is expected that the economic recovery will be slow, with estimated growth to be around 1.5 percent until 2013.

International trade Around 80 percent of Dutch exports go to other nations within the EU, and 70 percent of goods imported into the Netherlands come from the EU. Germany is the Netherlands' most significant export and import partner, receiving around 25 percent of the Netherlands’ exports and supplying around 17 percent of the Netherlands’ total imports.

Trade activity is highly developed, with special focus on food processing, chemicals, oil refinery and electrical machinery. The agricultural industry is highly mechanised, and although the sector employs a very low percentage of the work force, it produces large surpluses for export and ranks the third highest worldwide in terms of exports. One of the most famous Dutch exports is flowers. The Netherlands exports four billion flower bulbs a year, mostly tulips. 60 percent of these go to Germany, the UK, France and Japan. The US tops the list of individual customers, importing some 900 million bulbs a year.

The government does not discriminate between foreign and domestic companies, allowing foreign investors access to the same privileges and obligations as their Dutch counterparts. The Netherlands Foreign Investment Agency (NFIA) assists foreign firms to invest in the Netherlands.

Sectors The Netherlands’ single most dominant sector is that of business services, which accounts for approximately two-thirds of both its GDP and workforce. Mineral extraction, especially the production of natural gas, is another prominent sector.

28 The services sector has shown marked growth, while agriculture and industry have declined in their percentage contribution to GDP. Nearly 80 percent of the Dutch workforce is engaged in the services sector, in areas such as transportation, financial and business services (including banking and insurance), and goods distribution.

Other sectors that contribute consistently to the Dutch economy include retail, restaurants, repair services and health care. Important industrial activities include food processing, chemicals, oil refining and electrical machinery. The agricultural and food sector is also a vital part of the Dutch economy, generating approximately 10% of GDP. The Netherlands exports 75% of its agricultural produce.

Information and communications technology (ICT) The Netherlands is the sixth largest ICT market in the European Union and has one of the best information technology (IT) and telecoms infrastructures in Europe. The government is committed to growing the ICT sector through investment, cooperation and research. On a global scale, the Netherlands ranks second in broadband networks, third in e-Readiness, fourth in terms of ICT services exports and fifth in the ICT Development Index of the International Telecommunication Union. Opportunities exist in software and computer services in particular, as well as in data communications, network equipment and consumer products.

In the software market, the Dutch are interested in innovative solutions and are happy to deal with foreign suppliers (currently 65 percent of software is imported). Areas of opportunity include security software, internet software and services, and game software. Particular potential exists with small and medium sized companies. Growth in e-commerce and Internet usage has also driven an increase in the services market, creating opportunities in consulting, security services, desktop and network management, and application hosting and outsourcing.

29 Conclusions

Today, it has grown to cover most aspects of computing and technology. The reason why it has catapulted in importance is due to the improving accessibility, awareness and utility of technology. It is a common fact that a country’s IT potential is paramount for its march towards global competitiveness, healthy GDP and defense capabilities.

Despite the unprecedented global economic downturn, the Indian IT industry has weathered the storm well, and will achieve sustainable growth going forward. The strong demand for electronic hardware and software in all over world has been fuelled by a variety of drivers including the high growth rate of the economy, emergence of a vast domestic market catering to the new generation of young consumers.

Indeed, the Government has also identified growth of this sector as a thrust area as there remains great expectation for significant growth given the fairly low levels of penetration of technology.

The IT sector has also built a strong reputation for its high standards of software development ability, service quality and information security in the foreign market- which has been acknowledged globally and has helped enhance buyer confidence. The industry continues its drive to set global benchmarks in quality and information security through a combination of provider and industry-level initiatives and strengthening the overall frameworks, creating greater awareness and facilitating wider adoption of standards and best practices.

The industry is likely to continue growing from strength to strength, as local players incorporate best in class practices from global counterparts whilst retaining their edge in terms of lower cost of labor and focused governmental investments. Netherland is the best country for investment for TCS, because:

-It’s tax structure is advantageous. -It is the gateway of Europe -Netherland wants that Indian Companies should invest in Netherland, etc

30 Bibliography

1. http://info.shine.com/company/Tata-Consultancy-Services/74.aspx

2. http://info.shine.com/company/Tata-Consultancy-Services/74.aspx

3. http://content.icicidirect.com/newsiteContent/Research/TechnicalAnalysis.asp#

31

A

GLOBAL / COUNTRY STUDY AND REPORT

ON

“STUDY OF AEGON GROUP”

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Faculty Guide Assit.prof. Sneha Gandhi

Submitted by Parmar Mehul (108000592029) Panchal Sanjay (108000592068) Pandya Disha (108000592056) Modi Sunil (108000592079) Pancholi Nirav(108000592002) Nayak Divyesh (108000592092)

MBA SEMESTER IV

Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012

1

ACKNOWLEDGEMENT

This project is not the result of individual effort. It is a teamwork it was not is possible to complete the project alone.

There are different distinguished personalities who help us to furnish the project and we are thankful to them.

First, we want to give thanks to our university Gujarat technological university and our collage oxford school of management for giving us the opportunity to take part in this kind of project.

Next we want to give thanks to our honorable principal, Mr. Japan shah for his support last but not least we want to give thanks to all our faculties.

2

PREFACE

As we are the students of MBA-IV we are required to prepare Global country report. This subject is quite interesting and for acquiring further knowledge regarding the subject we have to prepare the project. The students have to select or choose the industry in which they are interested. As we wanted to learn about AGEON in Netherlands in detail.

The reason behind selection of this industry and company was we perceived this Industry as quite exciting. Further this industry is emerging industry .Further we also study the Political, Economical, Social and Technological factors which affect this industry.

Really this project has been provided us lot of learning values. As for this project we collect data from various sources such as Company Magazines, Library, Internet, Company Database etc. We pretty sure that this project will be really helpful to us in future also. Really such kind of projects enhances the knowledge of students in real sense.

3

INDEX

Acknowledgement…………………………..

Preface ………………………………………

SR.NO Particular Page no

1 ABOUT AEGON RELIGARE: - 5

2 STRUCTURE OF AEGON RELIGARE: 8

3 OPERATIONS: - 9

4 FUNCTIONS OF INSURANCE 9

5 REFORMS: - 12

6 MARKET SHARE: - 13

4

HISTORY AEGON was founded in 1983 from the merger of AGO Holding N.V. (itself created by the merger of three companies in 1968) and Ennia N.V. (itself formed by the merger of three companies in 1969).

AEGON acquired Scottish Equitable in 1994. In 1998 it formed Stonebridge International Insurance Ltd to create and market a range of personal insurance products, providing accident; health and unemployment cover to its own customers and via business partners.

In 1999 it acquired the life assurance business of Guardian Royal Exchange. That year it also bought Transamerica Corporation.

On August 13, 2007, AEGON and Merrill Lynch announced a strategic business partnership in the areas of life insurance and investment products. As part of the relationship, Aegon acquired two of Merrill Lynch's life insurance companies for US$1.3 billion.

On April 23, 2008, Alex Wynaendts succeeded the retiring Donald J. Sheppard as Chairman of the Executive Board and CEO of AEGON N.V. following the Group's Annual General Meeting of Shareholders: Donald Sheppard announced his retirement in November 2007, after six years as Chairman.

On October 28, 2008, the Dutch government and De Nederlandsche Bank agreed to give AEGON a €3 billion capital injection to create a capital buffer in exchange for convertible bonds to ease the group through the financial crisis. On June 15, 2011, AEGON fulfilled its key objective of repurchasing all of the EUR 3 billion core capital securities issued to the Dutch State. The total amount AEGON has paid to the Dutch State amounts to EUR 4.1 billion. Of this amount, EUR 3 billion covered the original issue of core capital securities, while an additional EUR 1.1 billion was paid in premium and interest.

On August 3, 2011, AEGON USA announced that all its various businesses will be grouped under a single brand name: Transamerica. Transamerica’s key businesses are life insurance, investments and retirement. The group includes companies whose history goes back over 100 years and whose products and services have become well-known throughout the USA, including founding companies Life Investors Insurance Company of America and Monumental Life Insurance Company.

5

ABOUT AEGON RELIGARE

AEGON Religare Life Insurance Company: -

AEGON, an international life insurance, pension and investment company, Religare, a global financial services group and Bennett, Coleman & company, India’s largest media house, have come together to launch AEGON Religare Life Insurance Company Limited (ARLI). This venture is dedicated to build a profitable customer-centric business with scale, providing a work environment that fosters excellence and innovation. This joint venture will balance a local approach with the power of an expanding global operation.

ARLI launched its pan-India operations in July, 2008 following a multi-channel distribution strategy with a vision to help people plan their life better. The fulfillment of this vision is based upon having a complete product suite, providing customized advice and enhancing the overall customer experience through superior service.

ARLI has launched a suite of products that are focused on providing the customer with the means to meeting their long-term financial goals. At the same time product development has been founded on the tenet of providing the customer with great value. ARLI products such as AEGON Religare iTerm Plan and AEGON Religare Future Protect Plan have been ranked among the best in terms of value and have attracted many external accolades.

About AEGON: -

As an international life Insurance, pension and investment company, AEGON has businesses in over twenty markets in the Americas, Europe and Asia. With headquarters in The Hague, the Netherlands, AEGON companies employ over 25,000 people and serve more than 40 million customers across the globe. The company’s common shares are listed on three stock exchanges: Amsterdam, New York and London. AEGON has more than 160 years of experience with its roots going back to 1844. AEGON holds 26% equity in ARLI.

6

About Religare Enterprises Limited: -

Religare Enterprises Limited (REL) is a leading emerging markets financial services group anchored in India. In India, REL offers a wide array of services including broking, insurance, asset management, lending solutions, investment banking and wealth management. With a network of over 2,200 business centres across 550 plus locations, and more than a million clients, REL enjoys a dominant presence in the Indian financial services space. It has also built an Asia and emerging markets focused Institutional equities and Investment Banking business and a multi-boutique global asset management platform to tap the broader opportunities offered by the most promising emerging markets around the world. REL holds 44% equity in ARLI.

About Bennett, Coleman & Company Limited: -

Bennett, Coleman & Company Limited (BCCL), part of the mammoth Times Group, is India’s largest media house. The 174 year old Times Group provides its clients with 360 degree spectrum of media assets in print, television, radio, internet and events. The group owns and manages powerful brands across media, like The Times of India, Times Now, Crest, City centric Mirrors, The Economic Times, ET Now, Maharashtra Times, Navbharat Times, Vijay Karnataka, Radio Mirchi, Times Music, Times OOH and indiatimes.com. All of its brands are multinational in outlook, traditional at heart and national in spirit. From the very first edition on November 3, 1838 the mammoth BCCL Group has come a long way.

7

STRUCTURE OF AEGON RELIGARE:

CEO Rajiv Jamkhedkar ↓ Director Ravi Mehrotra ↓ Director Jaan Aart ↓ Director David Wolf ↓ Director Kamlesh Dangi ↓ Director Sivakumar Sundaram ↓ CFO K. Gopalakrishnan ↓ Investment Management ↓ Agency & Direct Distribution ↓ Audit, Risk & Compliance

8

OPERATIONS: -

AEGON’s businesses focus on life insurance and pensions, savings and asset management products. The group is also active in accident and supplemental health insurance and general insurance, and has limited banking activities. AEGON has major operations in the United States (where it is heavily represented through World Financial Group and Transamerica), the Netherlands and the United Kingdom. In addition, the group is present in a number of other countries including Canada, Brazil, Mexico, Hungary, Poland, Romania, Slovakia, Czech Republic, Turkey, Spain, China, Japan and India. Aegon's world headquarters are in The Hague, Netherlands, and its U.S. headquarters are in Cedar Rapids, Iowa.

FUNCTIONS OF INSURANCE: - 1. Primary Functions 2. Secondary Functions 3. Other Functions • The primary functions of insurance include the following: - 1) Provide Protection

The primary function of insurance is to provide protection against future risk, accidents and uncertainty. Insurance cannot check the happening of the risk, but can certainly provide for the losses of risk. Insurance is actually a protection against economic loss, by sharing the risk with others. 2) Collective bearing of risk

Insurance is a device to share the financial loss of few among many others. Insurance is a mean by which few losses are shared among larger number of people. All the insured contribute the premiums towards a fund and out of which the persons exposed to a particular risk is paid. 3) Assessment of risk

Insurance determines the probable volume of risk by evaluating various factors that give rise to risk.

9

4) Provide Certainty Insurance is a device, which helps to change from uncertainty to certainty. Insurance is device whereby the uncertain risks may be made more certain.

• The secondary functions of insurance include the following: - 1) Prevention of Losses

Insurance cautions individuals and businessmen to adopt suitable device to prevent unfortunate consequences of risk by observing safety instructions; installation of automatic sparkler or alarm systems, etc. Prevention of losses causes lesser payment to the assured by the insurer and this will encourage for more savings by way of premium. Reduced rate of premiums stimulate for more business and better protection to the insured.

2) Small capital to cover larger risks

Insurance relieves the businessmen from security investments, by paying small amount of premium against larger risks and uncertainty.

3) Contributes towards the development of larger industries

Insurance provides development opportunity to those larger industries having more risks in their setting up. Even the financial institutions may be prepared to give credit to sick industrial units which have insured their assets including plant and machinery.

10

• The other functions of insurance include the following: -

1) Means of savings and investment

Insurance serves as savings and investment, insurance is a compulsory way of savings and it restricts the unnecessary expenses by the insured's For the purpose of availing income-tax exemptions also, people invest in insurance.

2) Source of earning foreign exchange

Insurance is an international business. The country can earn foreign exchange by way of issue of marine insurance policies and various other ways.

3) Risk Free trade

Insurance promotes exports insurance, which makes the foreign trade risk free with the help of different types of policies under marine insurance cover

11

REFORMS: -

After a long wait and prolonged consultation with stakeholders, the Insurance Regulatory and Development Authority (Irda) finally came out with guidelines on initial public offers (IPOs) during the year. This development will see private insurers hitting capital market in the coming years.

The IPO notification came in December, enabling private sector life insurers, such as HDFC Standard Life, ICICI Prudential and SBI Life, to tap the capital market for funds.

According to the guidelines issued by the Irda, life insurance companies which have been in business for over 10 years would be eligible to come out with IPOs. Besides, the promoters of insurance companies would be permitted to offload their stake in the company. However, the size of the public issue by life insurance companies will be decided by Irda.

The IPO guidelines for the sector had been hanging fire for three years. According to Ernst & Young partner Ashvin Parekh, the first major change in the sector was a complete change in the product composition. “We almost saw the death of Ulip products and an emergence of traditional products in the life insurance business. Life insurance had to be sold by insurers with assured returns. The Life Insurance Industry is groping to find products which would sell in the market place,” he said.

The direction of the regulations may not perhaps be substantially arguable but what was certainly hurting is the speed with which the changes were being made, he added.

Besides, the regulator allowed health insurance portability, doing away with the third party insurance pool.

Health insurance portability is another long-pending reform fructified during the year. If not satisfied with the services of the existing health insurer, you can change the company without losing policy benefits. The policy will also help people shifting from one part of the country to another. For want of such a facility they were put to disadvantage due to lack of their insurers' offices at new locations.

12

Also, in case of change of jobs, policy holders lose health insurance cover as they could not change their insurer. The new facility will also help those policy holders who stick to one insurer throughout life for fear of losing the cover for pre-existing diseases.

"Though health insurance portability saw slow take off in 2011, we expect more impact in 2012," Max Bupa Health Insurance CFO Neeraj Basur.

"We anticipate customer centricity to take center stage in 2012. This will reflect in services offered by various health insurance players, be it claim servicing, TAT or the overall relationship with the insurer," Basur said.

There was cheer for general insurance companies as Irda decided to scrap the common pool (Indian Motor Third Party Pool System) used by insurers to settle accident claims, from April 1. The dismantling is being done as part of reforms and the scrapping of the fund pool system will lead to a rise in motor insurance premium. The pool was formed in early 2007 to ensure availability of cover for commercial vehicles that had been refused third-party insurance.

Third-party insurance cover protects the vehicle owner from any financial liability in case of damage to life or property in an accident to the third person. Major public and private sector insurance players have been demanding abolition of the third party insurance pool, saying that the arrangement for sharing claims was denting their profits.

Another prominent highlight was issuance of norms for banc assurance. The draft guidelines have suggested that banks continue to tie up with one insurance company in the life, non-life and health insurance spaces but only in a specified number of states. Under this, insurance companies will be allowed to partner with different banks and NBFCs in different states for selling their products.

However, according to the draft norms, banks and non-banking finance companies (NBFCs) will not be allowed to sell products of competing insurers in a particular state.

13

MARKET SHARE: -

Companies name Net profit/loss 1.Aegon religare 215 crore 2.Bajaj Allianz 427 crore 3.life insurance corp. 120 crore 4.Birla sunlife insurance 300 crore 5.HDFC std life insurance 2856 crore

Market Share of all Life Insurance Companies India: -

In line with expectations, life insurance industry’s new business volumes in the individual new business segment remained strong, growing 36% Y-o-Y and 23% M-o-M, in August 2010.

In the individual new business segment, while LIC, ICICI, and HDFC improved WNRP industry market share (YTD) by 3.8 percentage points, 1.5 percentage points, and 0.7 percentage points, respectively, Bajaj Allianz (1.8 percentage points), Birla (1.25 percentage points), SBI (1.26 percentage points) and Reliance (0.31 percentage points) lost significantly. At 5mFY11 end, private insurers’ market share stood at ~50%.

Here is how Various Life Insurers stack up against each in the Industry as a whole. The following Data suggests that LIC of India is still the market leader followed by ICICI Prudential, HDFC Standard Life, SBI, Reliance, Bajaj, Birla Sun Life, Max New York etc.

14

15

POLICIES AND NORMS OF NETHERLAND INCLUDING LICENSING/ PERMISSION/ TAXATION, ETC.

 Political, Administrative and Legal System:

The Netherlands is a constitutional monarchy and has a parliamentary democracy. The Constitution (1814) is the most important document of state in the Netherlands. It contains the fundamental rules for the political and legal structure of the Netherlands and establishes the fundamental rights of its citizens. It is the highest national law of the state; other laws are required to comply with its provisions.

Political elections are held every four years. These elections are to the Lower House of Parliament, also called the Senate (Eeerste Kamer), a directly elected assembly of 150 people. The Upper House, also called the House of Representatives (Tweede Kamer), which has 75 members, is elected by the executive bodies of the provincial councils.

As regards the courts, the Netherlands does not have a jury system. The district courts deal with the majority of civil cases. The courts of law deal with the more important (criminal) cases, while appeals against a judgment of a district court are also heard by the courts of law. Further appeal against a judgment of the courts of law lies with one of the five courts of appeal in the Netherlands.

 The Tax Structure of Netherland:

Profitability is your company's first priority. Netherlands' corporate tax structure advantageous to achieving business goals.

For centuries, the Netherlands has been a nation of traders. To ensure that this longstanding tradition endures, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands.

16

The Dutch tax system has a number of features that may be very beneficial in international tax planning.

Relatively low statutory corporate income tax rate of 25% (20% for first 200,000 Euro) Possibility of obtaining advance tax rulings from the Dutch tax authorities giving certainty on future tax position Innovation box resulting in an effective corporate tax rate of 5% for qualifying profits R&D allowance for qualifying R&D wage costs (WBSO) Tax deduction facility for R&D operating costs and investments in R&D assets (RDA) Favorable participation exemption regime Fiscal unity regime providing for a tax consolidation of companies within a group and therefore to freely offsetting profits and losses among group members Transfer pricing practice in accordance with OECD Transfer Pricing Guidelines and the possibility to obtain an Advance Pricing Agreement (APA) The possibility to carry forward losses for nine years and to carry them backward for one year Wide tax treaty network to avoid double taxation and reducing withholding taxes on dividends, interests and royalties (for interest and royalties often to 0%) No statutory withholding tax on outgoing interest and royalty payments Favorable tax treatment for foreign employees (30% tax ruling) VAT deferment upon import: no upfront payment of VAT Dutch Tax Authorities: access to the tax inspector Dutch Customs Authorities: practical and pro-active approach

17

1) PRESENT TRADE BARRIERS FOR IMPORT/EXPORT:

10.1) IMPORT TRADE BARRIERS:

Trade barriers are government actions, especially tariffs, import quotas, and assorted non- tariff regulations and restrictions that are intended to increase net exports by restricting imports. By increasing net exports (and creating a more "favorable" balance of trade), the domestic production of a nation increases, which then increases domestic income and employment.

 Tariffs

Tariffs are simply taxes placed on imports. They work like any other taxes. A tariff is added to the price of the imported good. The resulting price of the import is thus higher, which tends to decrease the quantity purchased. And if fewer imports are purchased, then more domestic production is sold.

Tariffs are commonly imposed if domestic producers are able to convince government policy makers to compensate for foreign producers who unfairly gain a competitive advantage due to low foreign wages, dumping practices, or low production costs. However, tariffs are also imposed as a general means of limiting imports.

Tariffs are often the trade barrier of choice because tax revenue is paid to the government treasury. Not only do domestic producers benefit from trade protection, but the government sector benefits from extra tax revenue, revenue that in principle could be used to compensate domestic consumers that might be harmed by the trade barriers due to higher prices and restricted access to production.

 Import Quotas

The second of three trade barriers designed to restrict imports and promote exports is quotas on imports. In general, a quota is simply a quantity restriction placed on a good, service, or activity. For example, employers often face hiring quotas for different demographic groups and sales representatives often have quotas for sales activities. Import quotas are then merely legal restrictions on the quantities of imports that are imposed by the domestic government.

Import quotas can be established as a simple aggregate, presumably satisfied on a first-come- first-serve basis. Once the total is reached, then no more imports of the particular good are allowed. Alternatively, the total quota can be divided among foreign producers, perhaps pro- rated based on past imports.

Import quotas are imposed based on any of the justifications for trade barriers, but it is particularly important when it comes to national security. If, for example, the military relies on a particular piece of computer equipment for missile guidance systems, then reliance on

18

any foreign imports could be problematic. A "zero" import quota might be the best trade barrier policy.

 Non-tariff Barriers

The third of three common trade barriers is assorted non-tariff barriers. These non-tariff barriers primarily include government regulations applied to specific products. The regulations might apply to production techniques, product safety, environmental quality, or ingredients and other inputs. These regulations might reflect the consumer preferences of the domestic economy or unique production techniques available only to domestic producers.

If, for example, domestic consumers value environmental quality or product safety, then government regulations preventing foreign imports that do not meet domestic standards might be imposed. Alternatively, domestic production relies on a unique naturally occurring input, then government regulations preventing foreign imports that do not use this input might be imposed.

While these non-tariff barriers are often justified to protect domestic consumes, they are also just as often imposed to prevent competition for domestic producers.

10.2) EXPORT TRADE BARRIERS:

The UK Strategic Export Control Lists form the basis of determining whether any products, software or technology that you intend to export are 'controlled' and therefore require an export license.

The lists include reference to a wide range of items that could be used for military purposes, for torture or capital punishment or for the purposes of developing or manufacturing chemical, biological or nuclear weapons.

If your items are referenced on the Control Lists (i.e. listed under a Control List entry or 'rating') then you will need to apply for license from the Export Control Organization (ECO), part of the Department for Business, Innovation and Skills (BIS). The ECO is the UK government's regulatory authority for export licensing of strategic goods.

You should also note that if your goods are not listed on the UK Strategic Export Control Lists, that the ECO has the power to invoke 'End-Use Controls' if there are any specific concerns about military or weapons of mass destruction (WMD) end-use.

This guide will explain how the Control Lists are organized, how they are maintained and updated, and where you can seek further help and advice.

19

 Export Control Act 2002 and Export Control Order 2008

UK export controls are designed to restrict the export and communication of sensitive technology or strategic goods, with the aim of preventing weapons of mass destruction (WMD) proliferation and countering international threats such as terrorism. The controls apply equally to the academic community as to any other exporter, and cover physical export, electronic transfer, non-electronic transfer (which may include verbal), or by any other means. Where a transfer or export falls under one or more of the Controls a license may be required in order to continue, or extreme circumstances the transfer may not be able to take place. Export controls and any licenses required are administered by the Export Control Organization (ECO). It should be noted that failure to obtain an appropriate license to export controlled goods may result in a criminal offence being committed.

------

20

A GLOBAL / COUNTRY STUDY AND REPORT ON “ ______BLUE STAR______”

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Ms. Priyanka Nair Asst. Professor

Submitted by 1. CHHAYA DHARMENDRA (108000592007) 2. DODIA MAHINDER SINGH (108000592060) 3.DIWAKER AMITESH (108000592008) 4.JHA RAHI (108000592107) 5. JOSHI JAYESH (108000592019)

[Batch: 2010-12] MBA SEMESTER IV Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012 PREFACE

This project has been taken with a view to make an in depth analysis of latest & unique marketing strategies employed by Blue Star Ltd. With special reference to Air conditioners & thus uncover the reasons that have propelled the company to retain its position as leading company in AC Industry despite of stiff competition from other competitors.

The present study creates awareness about the product quality & unique features put forth by Blue Star Ltd.

It also provides knowledge to the readers about customer preferences & competitive analysis between various competitive firms.

The present is an effort to formulate strategy to boost up the market share for AC’s for

Blue Star Ltd.

i ACKNOWLEDGEMENT

I have been able to prepare my report successfully and I acknowledge a special thanks to all those people without whose support it was impossible for me to make the project report.

I would hereby take this opportunity to show my gratitude towards all my mentors for what I have learnt during my training. A good response, feedback and co-operation given by whole staff helped me in gaining knowledge and solving my queries. The successful completion of this project could not have been possible without the co- operation and support of my faculty guide and company guide who have given complete information for the project. I feel immense pleasure to thank MR.JAPAN SHAH H.O.D OF OXFORD SCHOOL OF MANAGEMENT. For making available all facilities in fulfilling the requirements for the research work.

I forward my appreciation to respected coordinator of the OXFORD COLLEGE. PROF. PRIYANKA NAIR. I express my gratitude to who supported and guided me throughout the project period.

ii INDEX

SR.NO PARTICULARS PAGE NO

1 1 INTRODUCTION 13 2 MARKETING STRATEGY 16 3 COMPARTIVE ANALYSIS 19 4 NATIONAL POLICY 23 5 MARKET COMPETITORS 26 6 PRESENT POSITION IN MARKET 29 7 SWOT ANALYSIS 32 8 LICENSES & TRADE BARRIERS 37 9 OPPORTUNITIES 39 10 CONCLUSION 1 COMPANY OVERVIEW

Blue Star is India's largest central air-conditioning company with an annual turnover of Rs 2270 crores, a network of 24 offices, 5 modern manufacturing facilities, 650 dealers and around 2500 employees. Blue Star has business alliances with world renowned technology leaders such as Rheem Mfg Co, USA; Hitachi, Japan; Eaton - Williams, UK; Thales e- Security Ltd., UK; Jeol, Japan; ISA, Italy and many others, to offer superior products and solutions to customers. The Company has manufacturing facilities at Thane, Dadra, Bharuch, Himachal and Wada which use state-of-the-art manufacturing equipment to ensure that the products have consistent quality and reliability. Blue Star fulfills the air-conditioning needs of a large number of corporate and commercial customers and has also established leadership in the field of commercial refrigeration equipment ranging from water coolers to cold storages. Blue Star's other businesses include marketing and maintenance of hi-tech professional electronic and industrial products. Blue Star primarily focuses on the corporate and commercial markets. These include institutional, industrial and government organizations as well as commercial establishments such as showrooms, restaurants, banks, hospitals, theatres, shopping malls and boutiques.

VISION, MISSION, OBJECTIVES

· To deliver a world class customer experience. · Focus on profitable company growth. · Be a company that is a pleasure to do business with. · Work in a boundary – less manner between divisions to provide best solutions to customers. · Win our people’s hearts and minds. · Place the company’s interest above one’s own. · Encourage innovation, creativity and experimentation in what we do. · Build an extended organization of committed business partners. · Be a good corporate citizen.

2 History and growth of company

Blue star was founded in 1943, by MOHAN .T .ADVANI, an entrepreneur of exemplary vision and drive. The company began as a modest 3-member team engaged in reconditioning of air conditioners and refrigerators.

An expanding blue star then ventured into the manufacture of ice candy machines and bottle coolers and also began the design and execution of central air-conditioning projects. Then came the manufacture of water coolers.

In 1949, the proprietorship company set its sights on bigger expansion, took on shareholders and became blue star engineering company private limited. Ever since, there has been a constant and profitable growth. Blue star diversified and took up agencies for material testing machines and business machines.

The export arena beckoned and the company began exporting water coolers to dubai, where in fact, 'blue star' soon became the generic name for water coolers. The sixties and the early seventies witnessed blue star continuing to expand and thrive. A team of dedicated professionals aided MOHAN T ADVANI in ever furthering his vision of a profitable company dedicated to its ideals of professionalism and success.

Employee strength crossed the 1000 mark and the company went public in 1969 to become blue star limited, as it continues to be called today. Blue star crossed the rs. 500 corer milestones in 2000 and the rs. 600 corer milestones in 2002-03. With the boom in construction activity and increased infrastructure investments, the company leveraged its leadership position to grow aggressively.

In the following three years, the company nearly doubled its turnover, clocking rs 1178 cores in 2005-06. Even more than size, blue star enjoys an enviable reputation as an ethical corporation, ever mindful of its obligations towards customers, shareholders, dealers, business partners, employees and the environment in which it operates.

3 MILESTONES

Year Event 1943 Mohan T advani establishes Blue Star Engineering Company as a proprietary firm 1946 Blue Star secures Melchior Armstrong Dessau agency 1947 Worthington selects Blue Star as Indian Partner. Manufacturing of ice candy machines and bottle coolers begins. Central air-conditioning system design and execution begins 1948 Manufacture of water coolers commences 1949 Proprietorship converted to Private Limited Companies 1954 Blue Star selected as distributor for Honeywell 1955 GDR Testing machines distributorship begins 1957 Perkin-Elmer tie-up marks the start of the electronics business. GDR business machines agency commences 1960 Total Income crosses the Rs 1 crore mark 1964 Total employment crosses 1,000

1965 Techniglas Pvt Ltd set up to manufacture insulation material 1969 Factory moves from Colaba in Mumbai to Thane 1970 Hewlett- Packard distributorship commences First skyscrapers of Mumbai Air India Building, Express Towers and Oberoi 1972 – Hotel set-up – all air-conditioned by Blue Star 1972 Total Income crosses Rs 10 crores. Employment crosses 2,000 1974 Water Cooler manufacturing license granted to Yusuf Alghanim, Kuwait 1977 Middle East thrust begins. Joint Venture (JV) with Al Shirawi in Dubai 1977 Hitachi Medical Equipment distributorship begins 1978 Industrial Division commences activity 1980 Bharuch Factory set up 1980-86 Major AC and R projects executed in the Middle East 1983 International Software Division inaugurated in Seeps

4 1984 York technology collaboration begins

1985 Manufacture of centrifugal packaged chillers commences at Thane Plant 1986 Total Income crosses Rs 100 crores 1987 Yokogawa Blue Star JV formed 1987 Gandhinagar factory set up for EPABX systems 1988 Blue Star becomes India’s largest central air-conditioning company 1988 Manufacturing collaboration with Mitsubishi 1988 Assembly of personal computers under the brand name ‘Quantum’ begins 1989 JV with Hewlett-Packard and Motorola 1990 Gandhinagar factory closes 1992 Total Income crosses Rs 200 crores 1992 Blue Star exits from Motorola JV 1993 Formation of Arab Malaysian Blue Star JV in Malaysia 1995 Blue Star exits from HP India JV 1997 Dadra Plant inaugurated 1998 Major thrust on dealerisation and brand building begins 1999 Blue Star exits from Industrial Projects business International Software business spun off to form Blue Star infotech, listed on 2000 stock exchanges 2001 Total Income crosses 500 crores. Export of air-conditioning products begins 2003 Blue Star exits Yokogawa JV 2005 Blue Star sets up new factory at Kala Amb in Himachal Pradesh 2006 Total Income crosses the Rs 1000 crores mark 2006 Blue Star opts for a 5 for 1 stock split 2007 Blue Star sets up its fifth factory at Wada, Thane District Blue Star powers into Building Electrification. Acquires Naseer Electricals, a 2008 leading Electrical Contractor 2008 Total income crosses Rs. 2000 Crores.

5 Manufacturing process

Blue star understands that skilled manpower and other staff members are an indispensable part of the manufacturing set-up and the management should work shoulder to shoulder with them. Management grade staff too is put through training programs on various aspects of manufacturing and business. Also, performance awards are announced every year. Apart from enhancing the skills of the staff, such initiatives create a positive, firm and lasting emotional bond between staff and company. This in turn contributes to greater productivity.

 Manufacturing systems

The factories make extensive use of it to enhance productivity and product development capabilities. All our factories are iso 9001: 2000 certified baan erp implemented in 3 factories and himachal under implementation.

 Raw material and material management

· Sheet metal fabrication A high degree of repetitive accuracy in sheet metal fabrication is achieved by using specialized equipment, cnc metal forming machines. The raw material used is prime quality, corrosion-resistant, galvanized steel for enhanced life of the product. The equipment used for processing the steel includes cnc machines such as an amada turret punch press, a lvd / amada hydraulic press-break. All these allow for high quality cabinet fabrication within tight tolerances  Power coating plant

The state-of-the-art powder coating plant covers a wide range of very specialized process equipment, and is fully automated. A water-softening unit treats the raw water before it is utilized in the automatic hot spray pre-treatment system. It provides an even distribution of chemicals, controlled by an auto dosing mechanism that maintains the chemical bath composition with the help of electronic sensors. After a final mineral water rinse, the components pass through a dry-off oven under dust-free conditions to remove all traces of moisture. The components are then transferred into the powder painting booth for coating, where temperature, humidity and dust levels are controlled. The powder painting equipment,

6 supplied by nordson, usa, is equipped with automatic electromechanical oscillators, for even powder deposition.

Desiccant dry air-with a dew point of minus 400 c - helps avoid any moisture contamination of the powder. A 'smart spray' mechanism senses the conveyor movement and component geometry to adjust powder flow. Polyester powder - ideally suited for out door applications - provides the maximum protection against uv deterioration and corrosion. The components finally pass through a temperature-regulated curing oven to achieve desired gloss and surface hardness.

 Heat exchangers

Experienced engineers create heat exchanger designs using high precision design software, which are then validated in our test labs. Blue Star also makes sure that the designs are energy efficient for optimum heat transfer.

· Fin and Tube: The sophisticated coil shops have some of the most advanced machines from USA, Japan and Korea. The Burr Oak coil line produces energy efficient DX heat exchangers. These have plain or enhanced split fins with grooved copper tubes for maximum heat transfer efficiency. Then the source plain and inner grooved copper tubes with coated aluminum fin stock of international quality from leading manufacturers to fit our specifications. · Shell and Tube: Blue Star has shell and tube exchangers using specially enhanced surface copper tubes and shell design as per Blue Star or TEMA standards. Blue Star uses Heat Transfer Research Inc. (HTRI design software for these heat exchangers). · Plate Type: Blue Star products also incorporate stainless steel plate heat exchangers for specialized process applications.

 System tubing

3-axis CNC copper tube-bending machines from Japan fabricate wrinkle-free system tubing to exact dimensions for a perfect stress-free fit. Special purpose machines carry out operations like end closing, flaring and forming for good joint formation. Prime quality copper tubes sourced globally help in optimum product performance.

7 · Brazing

The brazing process is carried out in an inert atmosphere to avoid oxidation and the resultant impurities from contaminating the refrigerant system. Specially selected brazing equipment and fixtures are used to produce high quality brazing. The joints are pressure-tested to check weld strength and leakage. The coils are then tested for fine leaks with ultra-sensitive electronic leak detectors. An automated coil brazing line from Korea ensures consistent quality brazing and leak proof joints.

· PUF installation

Blue Star fabricates CFC-free PUF insulated panels by using the latest equipment from Cannon. This enables to achieve a uniform and constant density of insulation for air handling units, telecom shelters and cold storage panels. Blue Star supply panels of up to 6 meters in length and 25 mm to 125 mm in PUF thickness. PUF insulation expertise finds use in a wide range of applications such as Air Handling Units, water coolers, deep freezers, reach-in coolers and mortuary chambers.

· Assembly and testing

The final product is assembled sequentially on conveyors, with in-built quality checks during assembly operations. Pneumatic tools permit torque-controlled rigidity, and specially coated corrosion-resistant hardware provides firm locking. Each machine is then electronically tested for leaks and run-tested for performance and electrical safety parameters before packaging.

8 PRODUCTS

· CENTRAL AIRCONDITION

The building blocks of Blue Star’s solutions are its products. The most comprehensive range of air-conditioning products in the country. A wide range of models are available in each product category to ensure that the air-conditioning system design is implemented without any compromise. All products have been designed on the energy-efficiency platform, and offer a host of advanced features. · Room air conditioners

By being an expert in the area of central air-conditioning, it also helps us understand the cooling requirements of a diverse range of applications. This expertise, knowledge and the skills have helped us to have some of the most technologically advanced and energy efficient air-conditioning solutions for small spaces.

· Commercial Refrigeration Having been the leaders in commercial refrigeration, we have a wide range of products catering to various small and large scale industries

· Cold storages

Blue Star’s Cold Storage Division offers us a wide range of cooling and preservation solutions. Solutions tailored made to suit any industry that requires storage of perishable produce over extended periods of time without suffering any loss of quality – be it in look, feel, touch, taste or chemical composition. Industries that find Blue Star’s cold storage solutions enormously useful include the agriculture sector including horticulture and floriculture units, manufacturers of fresh produce of any kind, food processing units, pharmaceutical industries, seafood and other similar industries, as well as the dairy and hospitality sectors, including hotels, restaurants, and eateries.

· Specialty Cooling Products

9 Blue Star has developed specialized products for process applications, IT/ITES, telecom and the dairy industry. It has diverse experience and have a deep understanding of the demands on air-conditioning and refrigeration in each industry. This knowledge and domain expertise has helped in designing and manufacturing a range of specialized products which ensure that critical applications work seamlessly.

 Research & Development

Blue Star offers complete engineered products and solutions with differentiated features. With the extent of climatic conditions varying across the nation, our products are designed to suit the specific local conditions. Considering the shortfall of Electricity supply, all the products are designed for energy efficiency. Blue Star products are most preferred in the domestic market because of energy efficiency features. In the offer, they are widest range of products for varying applications. This is possible due to extensive research and development that goes behind the products.

All our factories are equipped with robust R&D facilities and a lot of importance is given towards continuous up gradation. Currently R&D team constitutes nearly 20% of the manufacturing division work force. This is a testimony to the significance that R&D has in the product development process at Blue Star. R&D team is encouraged to update with the latest techniques and processes in the field and thus are sent to various exhibitions / site visits across the globe. Consultants from various industries are also hired for specific industrial design projects. Blue Star also believes in associating itself with leading global organizations that have done path breaking work in the field of innovations. The company also has tie-ups with reputed companies for knowledge sharing and technical institutions like IIT, Mumbai, where individual projects are executed. R&D at Blue Star also handles customer specific requirements, which require tremendous amount of expertise in that particular domain. Software that R&D team has deployed and which is used on a regular basis - Pro-Engineer, Solid Edge, autocad, Pro Mechanics, R&R, HTRI, Mechanical Desktop, Rhino, Alias, CATIA, IDEAS, Solid Works, Patran, Hypermesh, Femap, Ansys, Nastran, Fluent, Flow Mechanica and Moldflow. Software packages including those for system design, air handling unit selection and heat exchanger optimization.

 Technology associates

10 Blue star has associated itself with global knowledge partners who have been leaders in specific product manufacturing. Through this partnership, blue star has been able to command a leadership position in the domestic market. Blue star initially tied-up with york in the mid 1980s. It has been able to leverage this expertise and learning to manufacture its own chillers. We now manufacture our own range of screw, scroll and process chillers. For cold rooms, blue star had tied-up with kolpak, usa and heat craft for freezing units. Rheem, usa not only provided technical support for building the world class dadra manufacturing unit, but also shared technical expertise. The foray in precision equipment business was achieved with support from eaton williams. Blue star now manufactures precision control packaged units for domestic and global markets.

 Business associates

In keeping with its win-win approach, blue star treats its vendors as not just suppliers, but as business partners and tries to build long term associations that are profitable both to the suppliers and to blue star. In line with this thought, blue star has entered into long term arrangements with its key suppliers, many of whom are world leaders. For instance, blue star sources its switchgears from siemens, compressors from danfoss of netherlands and refrigerant from dupont. General electric corp of usa provides motors, while hanbell of taiwan supplies screw compressors. Copeland of usa assists in system design.

Over the years, blue star has built a strong network of suppliers around it. Not only that, the company also helps in the development of its smaller suppliers by providing various business related and technical inputs to them. For instance, since the vendors are also manufacturers, they will benefit from some of the good manufacturing practices that blue star adopts. Blue star has educated a number of small vendors on the importance of iso certification and encouraged them to get certified within a certain time period. This approach has greatly boosted the morale of vendors and firmly bonded them with blue star. Also, it ensures that the suppliers walk side-by-side with blue star on the path to growth.

Gujarat air-conditioning industry

 Gujarat, one of the major states in the west zone of India inline with Maharastra including cities like Mumbai and Pune. Gujarat is one of the upcoming state and industrial prominent regions in west zone. Industrial majors like Reliance, IFFCO, Sanghi, Ambuja, Essar, L & T Etc. have their plants in Gujarat. The service industries

11 like banks, insurance, telecom, call centers, hospitals etc. and entertainment industry multiplexes are also booming in Gujarat. The standard of living is improving and the people are spending lavishly to improve their status. Many of the products, which were considered as luxury goods, have slowly become necessity for Gujarat public.

 Gujarat air-conditioning market constitutes to around 5-6 %, which comes out approximately to 80,000 units per annum. Major cities like Ahmedabad, Surat, Baroda, and Rajkot constitutes the major portion of air-conditioning sales in Gujarat. All the major players at national level have their operations in Gujarat. Mainly players like LG, Hitachi, Voltas, and Carrier have strong position in Gujarat. The major difference between the national level market and Gujarat market can be seen from the following table: -

Number of position (sales volume ‘07) Gujarat All India First LG LG Second Hitachi Samsung Third Samsung Carrier Fourth Voltas Hitachi

Geographic and segment wise distribution of Gujarat AC market:

Gujarat air-conditioning market constitutes to around 6-7% of national volume. It has been estimated at 80,000 units per annum in the year 2002. Region-wise Gujarat market can be distributed into four major regions viz. Ahmedabad and North Gujarat, Central Gujarat, South Gujarat and Saurastra. North Gujarat constitutes of Mehsana, Sabarkantha, Banaskantha and Amreli. Central Gujarat includes Baroda, Panchmahal, Bharuch and Kheda. Surat, Vapi, Navsari, and Valsad contribute to South Gujarat. Saurastra region includes Rajkot, Bhavnagar, Junagadh, Jamnagar, Surendranagar and Kutch.

12 13 MARKETING ACTIVITIES AND MANAGEMENT IN BLUE STAR

 EXPORTS

Blue Star has been exporting its products to the Middle East for over two decades. Blue Star products have stood the test of time in some of the most difficult climatic conditions in the world such as UAE, Qatar, Bahrain, Oman and Kuwait. On offer it has a comprehensive range of products such as chillers with screw and hermetic scroll compressors, a wide range of air handling and fan coil units, duct able packaged and duct able split air conditioners including the heat pump versions. Blue Star also offers unitary products such as window and split air conditioners, deep freezers, cold rooms, water coolers and specialized air conditioners for precision control applications, Variable Refrigerant Flow (VRF) Systems with digital scroll technology and process chillers with frequency modulation. These world- class products are manufactured at our state-of-the-art manufacturing facilities in India. All the manufacturing facilities are ISO 9001: 2000 certified, and are powered through integrated Enterprise Resource Planning (ERP) software. Moreover, most of the products go through stringent tests on reliability and performance in our test labs.

 SUPPLY CHAIN MANAGEMENT

Rapid growth coupled with volatility of input costs necessitated an agile and adaptable supply chain. The Blue Star focused on both the efficiency and responsiveness of all aspects of the supply chain by improving all round execution capability. A combination of short term and long term view along with the support of business associates helped the Company tide over the uncertainty and turbulence of increasing input costs. The supply chain adequately met the increased demands of the market place supporting greater channel and project business success.

14  CHANNEL DEVELOPMENT

Blue Star has around 180 systems dealers who exclusively deal in the Company's systems businesses consisting of packaged air conditioning and cold rooms. These dealers are provided technical expertise, installation and service competence of a high order. On the other hand, room air conditioners and refrigeration products, which are simple to install, are sold through a larger network of approximately 600 dealers. Most of them deal exclusively with Blue Star products in the HVAC domain.

A few are multi-brand, multi-product dealers. The Company has established a Channel Management Centre to oversee the policy framework, certification and development of dealers and also put in place a Training Department for training channel partners. During the year, the Company implemented a number of initiatives in order to strengthen the competence of the dealer channels and make them more robust.

A Management Development Program (MDP) for systems dealers was held to impart the essentials of managing a business professionally. Systems dealers were also put through a Sales Management training programme in order to enhance their sales competence.

15 16 FINANCIAL DATA ANALYSIS

Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 12 mths 12 mths 12 mths 12 mths 12 mths Sources Of Funds Total Share Capital 17.99 17.99 17.99 17.99 17.99 Equity Share Capital 17.99 17.99 17.99 17.99 17.99 Share Application Money 0.00 0.00 0.00 0.00 0.00 Preference Share Capital 0.00 0.00 0.00 0.00 0.00 Reserves 555.51 473.69 349.50 245.92 195.34 Revaluation Reserves 0.00 0.00 0.00 0.00 0.00 Networth 573.50 491.68 367.49 263.91 213.33 Secured Loans 204.59 8.93 22.52 36.29 39.05 Unsecured Loans 213.79 0.00 1.08 0.25 50.00 Total Debt 418.38 8.93 23.60 36.54 89.05 Total Liabilities 991.88 500.61 391.09 300.45 302.38 Mar '11 Mar '10 Mar '09 Mar '08 Mar '07 12 mths 12 mths 12 mths 12 mths 12 mths Application Of Funds Gross Block 374.05 351.88 332.87 272.94 231.17 Less: Accum. Depreciation 180.98 154.22 144.92 134.84 116.73 Net Block 193.07 197.66 187.95 138.10 114.44 Capital Work in Progress 28.47 1.58 24.79 18.09 2.41 Investments 101.84 4.20 4.38 4.57 5.30 Inventories 400.57 258.01 207.30 273.49 188.08 Sundry Debtors 778.59 628.21 643.08 483.74 350.68 Cash and Bank Balance 46.49 13.22 4.80 1.91 3.81 Total Current Assets 1,225.65 899.44 855.18 759.14 542.57 Loans and Advances 618.65 503.85 292.68 257.49 85.65 Fixed Deposits 0.00 0.00 0.85 0.76 0.80 Total CA, Loans & Advances 1,844.30 1,403.29 1,148.71 1,017.39 629.02 Deffered Credit 0.00 0.00 0.00 0.00 0.00 Current Liabilities 1,073.54 990.09 672.97 638.25 352.21 Provisions 102.27 116.04 302.37 240.87 98.83 Total CL & Provisions 1,175.81 1,106.13 975.34 879.12 451.04 Net Current Assets 668.49 297.16 173.37 138.27 177.98 Miscellaneous Expenses 0.00 0.00 0.60 1.42 2.25 Total Assets 991.87 500.60 391.09 300.45 302.38 Contingent Liabilities 171.17 141.27 47.70 123.12 65.92 Book Value (Rs) 63.77 54.67 40.86 29.34 23.72

17 Blue Star Live Stock Price, Share Chart, Quotes, NSE, BSE

18 19 Electronics Industry

Electronics Industry reported at USD 1.75 Trillion is the largest and fastest growing manufacturing industry in the world. It is expected to reach USD 2.4 Trillion by 2020. The demand in the Indian market was USD 45 Billion in 2008-09 and is expected to reach USD 400 Billion by 2020. Domestic demand is expected to be driven by growth in income levels leading to higher off-take of electronics products, automation demands of corporate sector and the government’s focus on e-governance. The domestic production in 2008-09 was about USD 20 Billion. However, the actual value-addition in the domestically produced electronic product is very low, ranging between 5 to 10 percent in most cases. At the current rate of growth, the domestic production can cater to a demand of USD 100 Billion in 2020 as against a demand of USD 400 Billion and the rest would have to be met by imports. This aggregates to a demand supply gap of nearly USD 300 Billion by 2020. Unless the situation is corrected, it is likely that by 2020, the electronics import may far exceed oil imports. This fact goes unnoticed because electronics, as a “meta resource” forms a significant part of all machines and equipment imported, which are classified in their final sect oral forms, for example, automobiles, aviation, health equipment, media and broadcasting, defense armaments, etc. It is also pertinent to note that Indian electronics hardware production constitutes only around 1.31% of the global production. On the other hand, the share of global electronic equipment production of the largest contributing nation has increased from 17% in 2004 to 33% in 2009. Conversely, the country’s imports are expected to rise from 50% to 75% even as demand is rocketing. India is a recognized global player in software and software services sector. It lags behind in electronics hardware manufacturing capabilities, though it is increasingly becoming a destination for chip design and embedded software. The vision is to transform India into a global hub for electronics system design and manufacturing (ESDM) so as to meet the growing domestic and global demand.

There are many challenges to advance the same – infrastructure gap, tax structure, supply chain and logistics, inflexible labor laws, limited R&D focus, inadequate funding and limited value addition. Recognizing the importance and potential of the Electronics Sector, several economies in the Asia-Pacific region have repositioned themselves through infrastructural investments and proactive policies to emerge as a global power- house in this field.

20  THE GOVERNMENT POLICY

The attitude of the government to the industry in general has been influenced by the Perception of white good as a luxury item. Only after 1993 did the government liberalizes its attitude towards white goods.

Till 1994, excise duty on ac’s varied from rs.7, 000/- for 0.5 tone ac’s to Rs. 9,000 For 1.5 tone models. In the 1994-95 to 1996-97 budgets, the govt. Gave considerable Relief to the air-conditioning sector. The excise duty was reduced from 80% to 60% in1994-95 and from 60% to 30% in the following years. In the exim policy, ac’s Continued to be in the negative list, which means they cannot be imported without license Or as baggage.

 PROFITABILITY

Margins in the industry vary depending upon the segment, model and sizes, between a Broad ranges of 10 to 20%. However margins in the window segment are the least. But These are reasonable in the case of split ac’s. Even then, for players who have their own Compressor manufacturing facilities, margins are higher. Margins are highest in central And packaged air- conditioning segments ranging between 20-24%.

 IMPORTANT FACTORS

The important factors that govern profitability in the air-conditioning industry are Product technology, volumes, distribution network, after sales service and Aesthetics. Most critical in the product technology is the compressor, which contributes About 40% of the total cost. The most common type is reciprocating compressor. This is Well suited for the Indian conditions where dust and ambient temperatures are relatively High. But the wear and tear is quite high necessitating frequent repairs.

The rotary compressor is suitable for conditions where temperature does not exceed 55Degree celsius. Beyond this, its cooling efficiency decreases. Hence it is suitable for Coastal areas like mumbai where temperatures are low as compared to central andNorthern india.

Also it cannot withstand voltage fluctuations, which are common in indiaAnd once spoiled it cannot be repaired. But the advantage is that it is much more efficient35than the reciprocating one at moderate temperatures, consuming less power withNegligible wear and tear problems.

The latest compressor technology is the scroll compressors. It has no part, which canCause wear and tear, is very efficient under variety of conditions and can be repairedInstead of being replaced. The three world leaders in compressor technology copeland,Bristol and tacumbch already have a presence in india through their collaboration withKirloskar, carrier aircon and siel respectively.

Since this is a volume driven business in the window segment and technology driven in The package segment, distribution network and after sales services are the deciding Factors in these two segments respectively. Being a consumer durable industry the Activities aspect too is important. While 40 to 45% of the sales in the window segment Come from first three

21 months of April to June and the rest from the other months, there is No such seasonality in other segments, so companies have to manage inventory with Minimum cost.

Outlook

During 2000-01 a total of about 7 lakh air conditioning units were sold and this is Expected to rise to a phenomenal 10 lakh units by the end of 2004. The industry has been growing at a healthy compound rate of 30% for the past three years and this pace is Expected to continue in the near future. While the growth rate in the domestic window Segment is expected to be highest at around 50%, other segments are also expected to Register healthy growth rates of around 28%. With all the major players investing money towards higher capacities and new entrants setting up their plants, supply is expected to Keep pace with demand.

Increasing income levels and change in life-styles have led to heavy demand for Consumer durables, esp. Air conditioners, washing machines and refrigerators. Since last Two three years they have penetrated most urban households.

Today, white goods is one of the most brand driven product segments where companies Success depends upon marketing power in terms of building brand equity and being able To maintain and support nation-wide sales and distribution network is a prime Requirement for effective market penetration. The cost of servicing and maintaining big Distribution network is phenomenal and this is one of the factors that resulted in regional Restriction of some brands.

In future demand composition is expected to tilt towards corporate, as more electronic Gadgets are used at the work place. The focus will shift from comfort cooling, to process Cooling where precise ambient conditions have to be maintained which naturally means that technology will play an important role.

22 23 IN INDIA

24 IN NETHERLAND

25 26 IN INDIA

· Blue star q3 total operating income at rs 589 crores

· Blue star to aggressively target the residential segment. Launches stylish room airconditioners with enhanced energy efficiency.

· Blue star to set up factory in ahmedabad for manufacturing of refrigeration products

· Blue star awarded rs 84 crore order for bangalore metro rail project phase - 1 Blue star q2 total operating income at rs 604 crores

· Blue star q1 total operating income up 6%.

· Blue star total income up 14% in fy11dividend of 350% recommended

· Blue star launches new range of vrf airconditioning systems with inverter technology

· Blue star q3 total operating income up marginally by 4%.

· Blue star launches stylish room air conditioners for the residential segment · Blue star q2 total operating income up 25%.

· Blue star bags air conditioning and plumbing orders worth rs 130 crores for new terminal at chhatrapati shivaji international airport, mumbai

· Blue star board approves upfront consideration of rs 80 crores for acquisition of d s gupta construction.

· Blue star q1 total operating income up 25%.

· Blue star net profit up 17% in fy10. Dividend of 400% declared.

27  FINANCIAL PERFORMANCE

The Companies financial expenses increased sharply from Rs. 8.45 crores In the previous year to Rs. 24.39 corers in the current year, due to a Higher interest rate regime and additional borrowings.

The major Slowdown in execution of several large projects, resulted in a Comparatively tardy cash flow and increase in the Capital Employed in The business. As a result, the Profit before Tax for the year saw a Reduction of 18% to Rs. 227.00 corers as compared to Rs. 276.62 corers In the previous year.

The higher income tax rate rose mainly due to lower benefits for the Himachal plant. This resulted in the Profit after Tax declining by 27% From Rs. 211.49 cores to Rs. 155.00 corers.

 EXPORT & FOREIGN EXCHANGE EARNINGS

Product exports revived during the year, growing by 33% to Rs. 130.8 crores. Foreign Exchange inflow for the year, including commission income, was Rs. 160.3 crores as compared to Rs. 129.4 crores for the previous year. Foreign Exchange outflow for the year was Rs. 561.5 crores as compared to Rs. 475.5 crores in the previous year.

 SUBSIDIARY COMPANY

During the year, the Company made an investment of Rs. 98 crores in the acquisition of the plumbing and fire fighting business of D S Gupta Construction Pvt Ltd, through the Companys wholly owned subsidiary, Blue Star Electro-Mechanical Limited, which was incorporated during the year.

28 29  STRENGTHS

Only Blue Star manufactures open-type centrifugal chillers with ozone friendly Refrigerant HCFC 123.

Only Blue Star manufactures variable air volume systems for economic localized Cooling control

Only Blue Star manufactures air handling units with dependable ratings to factory Precision and the widest choice with single skin, double skin, horizontal, vertical, Ceiling suspended and unitary.

Air-conditioning of the largest number of synthetic fiber plants in India exceedin25,000 Tons and 36 customers.

Largest Industrial air-conditioning contracts in India - RBI Note Mudran Private Limited: Rs.40 cores.

First to manufacture semi hermetic reciprocating compressors in India to International standards

First air-conditioning company to introduce the concept of a Comfort Shop.

It has a strong setup, Willis Carrier Engineering Center, to provide technological Support to develop new products and upgrade existing ones.

It has successfully introduced finance schemes that have taken air-conditioners out Of the luxury category and made it affordable for the homebuyer.

 Weaknesses

Considered as premium brand so middle class people think it is unaffordable.

Although BLUE STAR protects its Position in Domestic AC market but is Regularly losing market share.

Market penetration is still very low.

Low qualities resulting in exports prices being non competitive.

 OPPORTUNITIES

Confederation of Indian Industry (CII) has urged the government to reduce special Excise duty (SED) on air-conditioners from 16% to 8% in the forthcoming budget.

Opportunity to influence Growing Indian middle class in influencing their decisions With regard to the products offered by Blue Star through comparatively lower Prices. 30 Advent of Internet provides an excellent opportunity to reach to a large base of Customers and cut costs.

The increasing presence of multinationals in India for manufacturing be it Samsung, LG, Carrier, Hitachi, thus providing an opportunity for upgrading the Quality of manufacture in the country.

 THREATS:

Likely to face fierce competition from domestic companies as they have well acknowledged Brands, an extensive distribution network and better insights aboutThe local market conditions.

Increased threat from cheaper imports, especially from China.

MNC’s like Samsung, Carrier, LG and Voltas are continuously raising Their share while Blue Star despite of increasing sales is losing its marketShare.

31 32  Licenses

The most common instruments of direct regulation of imports (and sometimes export) are licenses and quotas. Almost all industrialized countries apply these non-tariff methods. The license system requires that a state (through specially authorized office) issues permits for foreign trade transactions of import and export commodities included in the lists of licensed merchandises. Product licensing can take many forms and procedures. The main types of licenses are general license that permits unrestricted importation or exportation of goods included in the lists for a certain period of time; and one-time license for a certain product importer (exporter) to import (or export). One-time license indicates a quantity of goods, its cost, its country of origin (or destination), and in some cases also customs point through which import (or export) of goods should be carried out. The use of licensing systems as an instrument for foreign trade regulation is based on a number of international level standards agreements. In particular, these agreements include some provisions of the General Agreement on Tariffs and Trade and the Agreement on Import Licensing Procedures, concluded under the GATT (GATT).

 Quotas

Licensing of foreign trade is closely related to quantitative restrictions – quotas - on imports and exports of certain goods. A quota is a limitation in value or in physical terms, imposed on import and export of certain goods for a certain period of time. This category includes global quotas in respect to specific countries, seasonal quotas, and so-called "voluntary" export restraints. Quantitative controls on foreign trade transactions carried out through one-time license.

Quantitative restriction on imports and exports is a direct administrative form of government regulation of foreign trade. Licenses and quotas limit the independence of enterprises with a regard to entering foreign markets, narrowing the range of countries, which may be entered into transaction for certain commodities, regulate the number and range of goods permitted for import and export. However, the system of licensing and quota imports and exports, establishing firm control over foreign trade in certain goods, in many cases turns out to be more flexible and effective than economic instruments of foreign trade regulation. This can be explained by the fact, that licensing and quota systems are an important instrument of trade regulation of the vast majority of the world.

The consequence of this trade barrier is normally reflected in the consumers’ loss because of higher prices and limited selection of goods as well as in the companies that employ the imported materials in the production process, increasing their costs. An import quota can be unilateral, levied by the country without negotiations with exporting country, and bilateral or multilateral, when it is imposed after negotiations and agreement with exporting country. An export quota is a restricted amount of goods that can leave the country. There are different reasons for imposing of export quota by the country, which can be the guarantee of the supply of the products that are in shortage in the domestic market, manipulation of the prices on the international level, and the control of goods strategically important for the country. In some cases, the importing countries request exporting countries to impose voluntary export restraints.

33 Agreement on a "voluntary" export restraint

In the past decade, a widespread practice of concluding agreements on the "voluntary" export restrictions and the establishment of import minimum prices imposed by leading Western nations upon weaker in economical or political sense exporters. The specifics of these types of restrictions is the establishment of unconventional techniques when the trade barriers of importing country, are introduced at the border of the exporting and not importing country. Thus, the agreement on "voluntary" export restraints is imposed on the exporter under the threat of sanctions to limit the export of certain goods in the importing country. Similarly, the establishment of minimum import prices should be strictly observed by the exporting firms in contracts with the importers of the country that has set such prices. In the case of reduction of export prices below the minimum level, the importing country imposes anti-dumping duty which could lead to withdrawal from the market. “Voluntary" export agreements affect trade in textiles, footwear, dairy products, consumer electronics, cars, machine tools, etc.

Problems arise when the quotas are distributed between countries, because it is necessary to ensure that products from one country are not diverted in violation of quotas set out in second country. Import quotas are not necessarily designed to protect domestic producers. For example, Japan, maintains quotas on many agricultural products it does not produce. Quotas on imports is a leverage when negotiating the sales of Japanese exports, as well as avoiding excessive dependence on any other country in respect of necessary food, supplies of which may decrease in case of bad weather or political conditions.

Export quotas can be set in order to provide domestic consumers with sufficient stocks of goods at low prices, to prevent the depletion of natural resources, as well as to increase export prices by restricting supply to foreign markets. Such restrictions (through agreements on various types of goods) allow producing countries to use quotas for such commodities as coffee and oil; as the result, prices for these products increased in importing countries.

Quota can be of the following types: 1) Tariff rate quota 2) Global quota 3) Discriminating quota 4) Export quota

 Embargo

Embargo is a specific type of quotas prohibiting the trade. As well as quotas, embargoes may be imposed on imports or exports of particular goods, regardless of destination, in respect of certain goods supplied to specific countries, or in respect of all goods shipped to certain countries. Although the embargo is usually introduced for political purposes, the consequences, in essence, could be economic.

 Standards

Standards take a special place among non-tariff barriers. Countries usually impose standards on classification, labeling and testing of products in order to be able to sell domestic products, but also to block sales of products of foreign manufacture. These standards are sometimes entered under the pretext of protecting the safety and health of local populations.

34  Administrative and bureaucratic delays at the entrance

Among the methods of non-tariff regulation should be mentioned administrative and bureaucratic delays at the entrance which increase uncertainty and the cost of maintaining inventory.

 IMPORT DEPOSITS

Another example of foreign trade regulations is import deposits. Import deposits is a form of deposit, which the importer must pay the bank for a definite period of time (non-interest bearing deposit) in an amount equal to all or part of the cost of imported goods.

At the national level, administrative regulation of capital movements is carried out mainly within a framework of bilateral agreements, which include a clear definition of the legal regime, the procedure for the admission of investments and investors. It is determined by mode (fair and equitable, national, most-favored-nation), order of nationalization and compensation, transfer profits and capital repatriation and dispute resolution.

 Foreign exchange restrictions and foreign exchange controls

Foreign exchange restrictions and foreign exchange controls occupy a special place among the non-tariff regulatory instruments of foreign economic activity. Foreign exchange restrictions constitute the regulation of transactions of residents and nonresidents with currency and other currency values. Also an important part of the mechanism of control of foreign economic activity is the establishment of the national currency against foreign currencies.

35  THE TRANSITION FROM TARIFFS TO NON-TARIFF BARRIERS

One of the reasons why industrialized countries have moved from tariffs to ntbs is the fact that developed countries have sources of income other than tariffs. Historically, in the formation of nation-states, governments had to get funding. They received it through the introduction of tariffs. This explains the fact that most developing countries still rely on tariffs as a way to finance their spending. Developed countries can afford not to depend on tariffs, at the same time developing ntbs as a possible way of international trade regulation. The second reason for the transition to ntbs is that these tariffs can be used to support weak industries or compensation of industries, which have been affected negatively by the reduction of tariffs. The third reason for the popularity of ntbs is the ability of interest groups to influence the process in the absence of opportunities to obtain government support for the tariffs.

 NON-TARIFF BARRIERS TODAY

With the exception of export subsidies and quotas, ntbs are most similar to the tariffs. Tariffs for goods production were reduced during the eight rounds of negotiations in the WTO and the General Agreement on Tariffs and Trade (GATT). After lowering of tariffs, the principle of protectionism demanded the introduction of new ntbs such as technical barriers to trade (TBT). According to statements made at United Nations Conference on Trade and Development (UNCTAD, 2005), the use of ntbs, based on the amount and control of price levels has decreased significantly from 45% in 1994 to 15% in 2004, while use of other ntbs increased from 55% in 1994 to 85% in 2004.

Increasing consumer demand for safe and environment friendly products also have had their impact on increasing popularity of TBT. Many ntbs are governed by WTO agreements, which originated in the Uruguay Round (the TBT Agreement, SPS Measures Agreement, the Agreement on Textiles and Clothing), as well as GATT articles. Ntbs in the field of services have become as important as in the field of usual trade.

Most of the NTB can be defined as protectionist measures, unless they are related to difficulties in the market, such as externalities and information asymmetries information asymmetries between consumers and producers of goods. An example of this is safety standards and labeling requirements.

The need to protect sensitive to import industries, as well as a wide range of trade restrictions, available to the governments of industrialized countries, forcing them to resort to use the NTB, and putting serious obstacles to international trade and world economic growth.

36 37 INDUSTRY AND MARKET OVERVIEW

The air-conditioning industry has a total market size of approx. Rs. 1500 crores. It can be Classified into windows, split, packaged and Chiller Air-conditioners. The split is divided Into ducted and non-ducted. The window and split AC have a current market of Rs. 900Crores and the central including Chillers command a market of Rs. 600 crores.  AIR-CONDITIONER IN INDIA

Product Segment Size (Rs. In cores) : Window and Split 900 (Approx.), Central and Chiller 600 (Approx.)The domestic Window Air-conditioner has been growing at the fastest rate but this has been Accompanied by increasing competition leading to low profit margins. Profits in this segment are Driven by volume growth. Against most developing countries, Indian market is Window AC oriented - both Commercially as well as house hold. Considering the low penetration of AC’s, the Segment is likely to grow, at least for the next 5 to 10 years.

The market for air-conditioners was earlier dominated by the unorganized sector as a Result of high excise duty. This sector accounted for around 55 to 60% of the market Shares only 2- 3 years ago. The proportion used to be 30:70 during 91-92. Then lowering of excise duties from 110%To 40% favored the organized sector by narrowing the price gap e.g., a 1.5 ton air conditioner Which costs Rs.45,000/- in 91-92, now costs below Rs. 30,000/- in the Organized sector against Rs. 24,000/- in the unorganized sector.

 OPPORTUNITIES

Confederation of Indian Industry (CII) has urged the government to reduce special Excise duty (SED) on air-conditioners from 16% to 8% in the forthcoming budget.

Opportunity to influence Growing Indian middle class in influencing their decisions With regard to the products offered by Blue Star through comparatively lower Prices.

Advent of Internet provides an excellent opportunity to reach to a large base of Customers and cut costs.

The increasing presence of multinationals in India for manufacturing be it Samsung, LG, Carrier, Hitachi, thus providing an opportunity for upgrading the Quality of manufacture in the country

38 39 Blue star is India’s largest central air-conditioning company with an annual turnover of Rs 2270 crores, a network of 24 offices, 5 modern manufacturing facilities, 650 dealers and around 2500 employees.

Blue star has business alliances with world renowned technology leaders such as USA; Hitachi, Japan; Eaton - Williams, uk; Thales e-security ltd., auk; , Japan; Italy and many others, to offer superior products and solutions to customers.

Blue star is working good in Indian market and if he want to do batter in the other country then he has to work hard on their strategy and making good relation with the customer of other country Blue star has to work on the different market strategies if they go to Netherlands especially on the price and quality.

Because Indian market is totally price sensitive but it not be same in Netherlands blue star have to make their strategy as per the Netherlands consumer choice and preference.

Blue star may be suffered from Netherland government rule and policy. So they have to sell their product as per the government policy.

Blue star have to follow the quality and customer service procedure compulsory when they operating in Netherlands because their government is follow hardly.

Over all Blue stars have a good opportunity to do good in Netherland market due to a good relation of Indian government with Netherlands government. And India and Netherlands import and export policy also fervor to expand the market of blue star from India to Netherlands

40 A GLOBAL / COUNTRY STUDY AND REPORT ON EBUDDY OF NETHERLAND

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF MASTER OF BUSINESS ASMINISTRATION

Submited By:- Submited By:- Rupesh Patel

1. Dharmesh M.Patel(108000592035) 2. Dharmendra N.Patel(108000592087) 3. Devang S.Patel(108000592104) 4. Dhara S.Patel(108000592051) 5. Deven P .Patel(108000592071) 6. Dharmendra S.Patel(108000592040)

(OXFORD SCHOOL OF MANAGEMENT) Affiliated to Gujarat Technological University Ahmedabad APRIL-2012 ACKNOWLEDGEMENT

This Project has been made possible through the direct and indirect Co-operation of various persons, who have inspired us at every step of my work. It is a matter of pride for us to acknowledge my profound gratitude to Mr. Rupesh Patel , Oxford School of Management, who is our guide and always facilitates us in gaining practical knowledge.

And above all, we are beholden to our Parents and other family members for their blessing and encouragement in completing this task.

1. Dharmesh M.Patel(108000592035) 2. Dharmendra N.Patel(108000592087) 3. Devang S.Patel(108000592104) 4. Dhara S.Patel(108000592051) 5. Deven P .Patel(108000592071) 6. Dharmendra S.Patel(108000592040) PREFACE

The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the Global Country study. GCSR also helps the student to devote his/her skill to analyze the various business opportunities in various countries across the globe, to evaluate them and to provide feasible recommendations on the provided data.

We have selected The Netherlands as the country and We have studied the company Ebuddy. Index

Sr.No. Title Page No.

1 History 5

2 Mission 6

3 Software variants in Ebuddy 7

4 Target Market 9

5 Balance Scorecard Roadmap 10

6 Ebuddy Profile 13 Country attractiveness study of 7 14 Netherlands 8 Product and Services of Ebuddy 16 1. History eBuddy was originally created by Paulo Taylor. The idea came to life when he made a bet with a friend to get MSN Messenger, as it was named in 2003, to work on a mobile phone. After several weeks, he won the bet and uploaded the application on a server. Visitors then asked if he could make a web version of the application. As user traffic spurred, Paulo decided to take the idea further. On September 9, 2003, Taylor together with two partners created EverywhereMSN.com. Microsoft however claimed the domain name and on December 4, 2003 the domain was changed to e-messenger.net. On May 1, 2004, e- Messenger became incorporated. On June 1, 2006, e-Messenger was renamed to eBuddy. On September 21st 2011, eBuddy announced they had reached 250,000,000 users. They also detailed that their mobile products received 33,000,000 users monthly. 2. Mission

A company’s mission describes the vision, its shared values and believes and its reason for being(Daft 2001). eBuddy’s mission is to “Provide instant messaging for everyone everywhere”. eBuddy’s vision is that instant messaging should be available to everyone, irrespective of which hardware device, software and instant messaging network a person has access to.

1. Real-time communication between two or more people based on typed text, images, voice and video which is conveyed via hardware that is connected to the internet. 2. A computer network consisting of hardware, software and network connections that offers instant messaging through the internet. 3. A person who has used one of eBuddy’s products since its introduction at least once. 4. Online advertisements consist of banners and text-links which are presented embedded in websites or software applications. They areintended to attract traffic to a website by linking viewers to the web site of the advertiser. Banners are constructed from an image or multimedia object, often employing animation or sound. Text-links are plain text fragments. 3. Software variants In Ebuddy eBuddy Web Messenger eBuddy Web Messenger is the free browser-based version of eBuddy. It does not require any installation of additional software other than a Web Browser. This is particularly useful when a Messenger Application cannot be installed, for example in the workplace or on shared computers. The current version of eBuddy Web Messenger was introduced on October 15, 2009.It is the third generation in of eBuddy's Web Messenger, mainly boosting speed and reliability improvements compared to the prior generation.

Other features include a combined buddylist for all chat networks, the tabbed chatting eBuddy is known for and full-featured chat like font formatting for messages and support for emoticons. Also the ability to send and receive offline messages. In August 2010 recent chat history, an inline YouTube player, an updated Facebook implementation and Desktop Notifications for Google Chrome were launched. The web messenger is available in multiple languages. In contrast to eBuddy's mobile Messengers, an eBuddyID is not required to use the Web Messenger. Prior generations of the Web Messenger included webcam chat, but this seems to be removed from the most recent version. eBuddy Mobile Messenger In June 2007, eBuddy Mobile Messenger,a Java ME client, was released that is claimed to work on the top 600 cellular phones used worldwide. This version offers features like uploading an avatar and sending pictures in the chat. The software is usable after being downloaded as an application. Features included in this variant are similar to the web messenger, with support for sending and receiving offline messages, being able to upload pictures to use as an avatar, and the ability to send pictures in chat. The Mobile Messenger also supports sound and vibration. A later version, released in January 2009, added more features which improved software usability, and lowered power use of the device running it. eBuddy Lite for iOS On July 13, 2007, eBuddy released an Alpha version for iOS operating system; the iPhone and iPod Touch. It is based on the same Ajax platform as the web version. At the start of 2008, this version was replaced by eBuddy Lite Messenger for iPhone. This mobile web-based version of eBuddy is optimized for the iPhone and also works on the iPod Touch. The features are very similar to the Mobile Messenger, but also include added support for the Safari browser found on the iPhone.

eBuddy for Android On May 14, 2009, eBuddy launched eBuddy for Android, an app to chat on smartphones running Android operating systems. The features provided by this variant are similar to the standard mobile messenger service, but are adapted to support the Android status bar, with support for sounds, vibrations, and buzzers.eBuddy for Android is available in the Android Market. It topped 250,000 downloads on January 14, 2010. eBuddy for Nokia eBuddy was released on the Ovi Store for Nokia smartphones in 2010. It reached 1 million downloads in under three months,and reached 3 million downloads by August 2010. eBuddy ID

In February 2008 eBuddy introduced the eBuddy ID, which allows easy access to eBuddy networks.With this eBuddy ID users are able to login with multiple Instant Messaging accounts, and are able to access to premium features like Webcam Chat. 4. Target market

eBuddy targets at reaching a global market of product users. Currently, the total number of product users has reached 45 million. The current percentage of users per continent is: 33% Europe, 20% North America, 28% South America, 14% Asia, 4% Australia Pacific and 1% Africa. eBuddy aims to reach the following market segments per product: Web messaging: - Youth and students, who already use instant messaging, at schools who can not use the regular chat applications due to restrictions on the school’s computers; - Working professionals, who already use instant messaging, at organizations who can not use the regular chat applications due to restrictions on the organization’s computers. Mobile messaging: - People who already use instant messaging and own a mobile phone capable of connecting to the internet. Television messaging: - People who already use instant messaging and own a television capable of connecting to the internet. 5. Balanced scorecard roadmap

Dominant, main and supporting success factors of Assiri et al.’s balanced scorecard implementation roadmap

The dominant factors in order of importance are:

1. Identify balanced scorecard perspectives Choose perspectives that suit the organization’s strategy and objectives.

Between 3 and 5 perspectives that cover all aspects and activities of the organization.

Kaplan & Norton’s four perspectives have been found to be appropriate for most companies and industries

2. Create balanced scorecard team Assign team for implementation consisting of members with various skills, knowledge and are from different departments.

3. Gain executives and seniors managers’ Acquire management commitment andr commitment esponsibility for implementation.

Management must be involved at every step in the implementation and show their commitment.

Planning

4. Communicate balanced scorecard The balanced scorecard has to be communicated throughout the whole organization from top to low level. Implementing a new system or project such as the balanced scorecard may bring a significant change in the way employees view their job, therefore it is important to ensure that everyone is involved at every level of the organization.

5. Initial plan Before implementation,sources of performance data should be identified. 6. Stimulate culture Culture is a crucial element to be prepared before implementing any new system in an organization. All organizational levels have to be prepared prior to introducing the balanced scorecard, starting at the top and permeating throughout the whole organization. Organizations need to create a culture where all employees can participate and be involved in the balanced scorecard implementation. Development

7. Mission, values, vision, strategy A clear mission, values, vision and strategy should be in place before identifying the balanced scorecard. The balanced scorecard concerns the implementation of already planned strategies. 8. Training The balanced scorecard is essentially a new approach for organization. It is about adopting new perspectives and processes, and about innovation and change. Consequently, employees’ training and education initiatives help facilitate this change by providing employees with the knowledge and skills they require to adapt to and lead to this change process.

9. Set objectives and measures All objectives in the balanced scorecard have to be derived from the organization’s strategy.

10. KPI’s Key performance indicators should be defined by the balancedm scorecard. They measure performance-linked corporate goals by mtracking performance across the balanced scorecard perspectives. By demonstrating the cause-and-effect relationships between key performance indicators, the balanced scorecard provides managers with an obvious understanding of how their decisions impact not only their area of responsibility, but also other departments and the overall organization strategy.

Implementation

12. Rolling out implementation plan Develop an implementation plan for the implementation of the balanced scorecard through the organization top-down. Assign responsibilities per department for implementation.

13. Cascading the balanced scorecard The balanced scorecard objectives and measures have to be cascaded from top to the bottom of the organization. The organization starts its balanced scorecard by identifying the strategic objectives in the upper level of the organization and then cascading to the lower departments to determine their achievements and contributions to overall goals. This cascading is translated in the balanced scorecard within the definition of the strategy map. 14. Information system design An information system that presents and communicates the balanced scorecard through the organization should be developed.

Sustainability

15. Automating the balanced scorecard Automation is crucial for balanced scorecard implementation success. Automation enables a quicker culture change, provides visibility to the balanced scorecard process and facilitates participation by a wider audience.Therefore, organizations should automate their balanced scorecard and choose the most appropriate software.

16. Updating balanced scorecard Kaplan and Norton believe that the rewards of measures and linking them with rewards executives and managers have to be tied with the results of the balanced scorecard measures (Kaplan & Norton 1996). The balanced scorecard team has to expect a number of changes in the measures of each perspective. Even the organizational strategy may require to be changed, due to sudden changes in internal or external circumstances. Therefore, performance measures have to be updated according to new circumstances. Despite changes of circumstances, the measures should be evaluated and reviewed at least once a year in conjunction with the organization planning.

17. Corporate alignment The balanced scorecard measures should work in congruence with norganization’s strategic objectives. Strategic initiatives should be aligned with strategic objectives identified in the balanced scorecard. 6. eBuddy Profile

Type : Private Founder(s) : PauloTaylor Jan-JoostRueb Onno Bakker Headquarters :Amsterdam, NetherlandsLondon, UK,San Francisco, California, USA Slogan : "Web and Mobile messaging for everyone everywhere" Website : www.ebuddy.com Type of site : Instant messaging Registration : Optional Available in : Multilingual Launched : 2003 Current status : Active

eBuddy is a privately held company which owns a browser-based web and mobile messenger service supporting various instant messaging services. eBuddy was launched in 2003 under the name e- Messenger, located at www.e-messenger.net, before rebranding itself in 2006 to eBuddy. eBuddy supports Windows Live Messenger, Yahoo! Messenger, AIM, Hyves, ICQ, Google Talk, MySpace Instant Messenger and Facebook Chat using one interface. eBuddy can also be accessed from mobile platforms such as Apple iOS, Google Android, Nokia Symbian and Microsoft Windows Phone 7.

The company is backed by Prime Technology Ventures and Lowland Capital Partners. It is headquartered in Amsterdam, Netherlands, and has offices in London, UK and San Francisco, USA. In addition to the software being available on the official website, users may host a log-in widget on their own webpages and blogs to provide direct access to the software more easily. 7. Country Attractiveness Study of Netherland

The Netherlands has extraordinarily high internet penetration with 82.9% of the country’s population having internet access and mostly via broadband. Compared to global and European penetration, Holland has a much higher percentage of its population surfing the internet than most other countries. You can see from the figures below, just how wide the gap is: ··· Worldwide: 6,710,029,070 people, 23.8% on Internet ··· Europe: 803,903,540 people, 48.9% on Internet ··· Netherlands: 16,645,313 people, 82.9% on most broadband Internet

Most important networks Because almost everybody has a reliable broadband Internet connection in the Netherlands, social media has grown fast. Not only the international ones, but also the “locals”:

Ebuddy eBuddy Reaches 100M Mobile Downloads Milestone Popular mobile IM app joins the ranks of Facebook, Google Maps & Opera Mini in reaching 100M mobile downloads. world’s leading independent web and mobile instant messaging (IM) aggregator service, announced today that it has achieved over 100 million downloads of its mobile applications since its launch in 2007, making it the pre-eminent independent mobile instant messaging platform in the world.

Hyves – Dutch social network ··· 9,000,000 members in NL ··· 2 / 3 minimum monthly logs ··· 8 million unique monthly visits ··· 6.5 billion page views per month ··· Average age 27 years ··· 80% = 13 to 34 ··· 66% = 35 to 49 ··· 30% = 50+ Facebook – international social network ··· 250 million active users, ··· avg. 120 Friends ··· 70% outside USA ··· 120 million visits daily Facebook ··· Facebook every day 600,000 new accounts ··· Particular growth> 35 years of age ··· 1 billion photos uploaded per month, ··· 10 million videos ··· 30 million mobile Facebook ··· In the Netherlands from 236,000 to 1,031,000

LinkedIn – international business network ··· 44 million members ··· 1 new member per second (86,000 per day) ··· half outside USA ··· The average LinkedIn user is a man of 41 with 15 years experience ··· In the Netherlands 1.5 million member Twitter – international microblog site ··· 400,000 members in the Netherlands

Sugababes.nl ··· 749,395 members in the Netherlands ··· Average between 15 – 21 years 8.Product And Services of Ebuddy

Chat everywhere! Chat ony our mobile phone with all your friend sonMSN, Yahoo!, AIM, Gtalk, ICQ and Facebook. eBuddy for iPhone Download to your iPhone&iPod Touch: Get it in the App Store Enjoy the best chat experience, specially designed for your iPhone & iPod Touch. ··· Stay online when you get a call ··· Push notifications for new messages ··· Swipe to switch between chats

eBuddy for Android Download to your Android phone : Get it in the Android Market Enjoy the best chat experience, specially designed for your Android phone. ··· Stay online when you get a call ··· New message alerts in Android status bar ··· Easy to switch between chats

eBuddy Mobile Messenger Download for the best mobile chat experience: get.ebuddy.com eBuddy Mobile Messenger has a low data usage and offers unique mobile features. ··· Chat & Share pictures with friends ··· Upload picture as avatar

eBuddy XMS

Unlimited free messages eBuddy XMS is free! It uses your Internet connection, which means you can easily share unlimited messages with your XMS contacts. Whether it's your neighbor or a friend at the other side of the world. You can XMS all you want. Use the 100+ emoticons to express yourself in any way you want.

Connect to your friends eBuddy XMS helps you to connect to all your friends. XMS users that are already in your phone book are added automatically your XMS contact list. Better still, you can link to your Facebook account to find even more friends.

Messaging you can count on You always know when your messaging has been sent and read. The dark dot tells you that your message has been sent. When the checkmark shows up, you know that your XMS friend has read your message. You’ll enjoy stable performance, since eBuddy XMS is built by the messaging pros at eBuddy. We have experience in mobile messaging and are processing over 17 billion messages each month. There is more to come… We are working hard to add more platforms and features. Like our Facebook page and you'll be the first to know!

A GLOBAL / COUNTRY STUDY AND REPORT ON “ CADILA PHARMACEUTICALS “

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

UNDER THE GUIDANCE OF

Faculty Guide: Sneha Gandhi

Submitted by : Kapadiya Kiran (Enr.108000592069) Kapadiya Nilesh (Enr.108000592053) Mehta Maulik (Enr.108000592077) Kiri Mayank (Enr. 108000592015) Limbachiya Ritesh (Enr. 108000592072) Khamar Shruti (Enr.108000592017)

MBA SEMESTER IV

Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012

1 PREFACE This project has been taken with a view to make an in depth analysis of latest & unique marketing strategies employed by cadila pharmaceutical. With special reference to healthcare products & thus uncover the reasons that have propelled the company to retain its position as leading company in Pharmaceutical Industry despite of stiff competition from other competitors. The present study creates awareness about the product quality put forth by Cadila Pharmaceutical. It also provides knowledge to the readers about customer preferences & competitive analysis between various competitive firms. The present is an effort to formulate strategy to boost up the market share for Pharmaceutical products for Cadila Pharmaceutical.

2 ACKNOWLEDGEMENT

We have been able to prepare my report successfully and I acknowledge a special thanks to all those people without whose support it was impossible for us to make the project report.

We would hereby take this opportunity to show our gratitude towards all my mentors for what I have learnt during ouir training. A good response, feedback and co-operation given by whole staff helped us in gaining knowledge and solving my queries. The successful completion of this project could not have been possible without the co-operation and support of our faculty guide and company guide who have given complete information for the project. We feel immense pleasure to thank MR.JAPAN SHAH H.O.D OF OXFORD SCHOOL OF MANAGEMENT. For making available all facilities in fulfilling the requirements for the research work.

We forward my appreciation to respected coordinator of the OXFORD COLLEGE. PROF. SNEHA GANDHI. We express our gratitude to who supported and guided us throughout the project period.

3 INDEX

No. Particulars Page no.

1. Introduction 5 2. Present Profile 6 3. Products 6 4. Numbers of Plants in Gujarat 7 5. Future Expansion Plans 8 6. Vision & Mission 8 7. Roles of pharmaceuticals in Indian Economy 9 8. Organizational Structure 10 9. Functions of Cadila pharmaceuticals 11 10. Competitive Position of Cadila products in India/Gujarat 13 11. Champion Brands 14 12. Healthcare in Netherland 15 13. History Of Netherland 16 14. Demographic profile of Netherland 17 15. Netherland’s Economic overview 19 16. Overview of industry 19 17. Overview of Business and Trade at international level 20 18. EXIM Policy of Netherland 22 19. Conclusion 23 20. Suggestion 24

4 INTRODUCTION

Cadila Pharmaceuticals Ltd. is one of the largest privately held pharmaceutical companies in India, headquartered at Ahmedabad, in the state of Gujarat. Over the last five decades, it has been developing and manufacturing pharmaceutical products and selling and distributing these in over 50 countries around the world. An integrated healthcare solutions provider with pharmaceutical product basket, it caters to over 45 therapeutic areas that include cardiovascular, gastrointestinal, analgesics, haematinics, anti-infectives and antibiotics, respiratory agents, antidiabetics and immunologicals. The company focuses on providing high quality, appropriately priced products to its customers and supports all these with dedicated customer service. Cadila Pharmaceuticals has a multicultural, multilingual and multinational workforce of more than four thousand employees including over two hundred people outside India in forty-nine countries of Africa, CIS, Japan and USA.

The company has one of the best Research and Development (R&D) setups in India, manned by more than three hundred and fifty scientists and engineers from various disciplines including biology, pharmacology, clinical research, chemistry, toxicology, phytochemistry and different disciplines of engineering. The company also participates in Public-Private partnerships for developing diagnostic, preventive and curative pharmaceutical and diagnostic products.

Cadila Pharmaceuticals is the first Indian company to get IND approval by USFDA for clinical trials to be conducted in India. Subsequently, the company has filed four more INDs with USFDA. Of the five INDs filed, one is for pulmonary tuberculosis; the trial is supported by Department of Biotechnology, Govt. of India. The remaining four are for various types of cancers, e.g., Lung Cancer, Prostrate cancer, Bladder Cancer and Melanoma. Thus all the INDs are for providing solutions to major global health care problems. The clinical trials on Prostrate cancer, Lung cancer and Bladder cancer are supported by Department of Science and Technology to encourage innovations.

The company has state-of-the-art manufacturing facilities conforming to the most stringent international cGMP norms vis-à-vis WHO-GMP, WHO, Geneva (GDF site for Anti- TB), TGA Australia (PIC/S), USFDA, UK- MHRA, MCC-South Africa, ISO 9001 and ISO 14001. Spread over hundred acres of land, Cadila Pharmaceuticals’ manufacturing facility at Dholka is the cynosure of all eyes, well equipped with world-class production facilities. The company’s two Active Pharmaceutical Ingredients units at Ankleshwar manufacture a wide-range of APIs and intermediates including three USFDA certified products. The manufacturing facility at Samba, near Jammu, started its commercial operations in August 2006. The first overseas formulation manufacturing facility of Cadila Pharmaceuticals Ltd. has commenced its operations in Ethiopia.

5 PRESENT PROFILE

NAME OF THE UNIT : Cadila Pharmaceuticals Ltd YEAR OF ESTABLISHMENT : 1950 LOCATION : Cadila Pharmaceuticals Ltd 294, GIDC Estate, Ankles war – 393002 TOTAL LAND AREA : 42,129.73 Sq. mts

REGISTER OFFICE : Cadila Pharmaceuticals Ltd Sarkhej-Dholka Road Bhatt, Ahmedabad-382 210, INDIA. Phone: +91-2718-225001 (15 Lines) Fax: +91-2718-225039 e-mail: [email protected] BANKER : HDFC & Bank of Baroda

 PRODUCTS :  Cardiovascular  NSAIDS  Antiseptic / Disinfectants  Antitubercular  Antihistaminic  Erectile dysfunction  CNS  Antiulcerant  Antidiabetic  Antiemetic

6 PLANTS IN GUJARAT

CADILA HAVE SIX DIFFERENT PLANTS IN GUJARAT:

 Surgical Supplies, Halol.  Plant Tissue culture, Hirapur.  Casil Health products Ltd, Parma Machinery, Specialty chemicals, Mehsana.  Soft Gelatin Capsules manufacturing facilities, Kadi (Kalol)  Active Pharmaceutical Ingredients (APIs) at Ankleshwar.  Dholka manufacturing plant, Ahemadabad.

7 FUTURE EXPANSION PLANS

 Cadila‟s present volume of the group is Rs. 650 Crore and strategic business plans are aggressively in vogue to double up the volume of business over the next three years.  Cadila‟s plan to launch at least 6 to 8 new introductions in the market for the next five years

 Vision

"Our vision is to be a leading pharmaceutical company in India and to become a significant global player by providing high quality, affordable and innovative solutions in medicine and treatment."

 Mission

"We will discover, develop and successfully market pharmaceutical products to prevent, diagnose, alleviate and cure diseases.

We shall provide total customer satisfaction and achieve leadership in chosen markets, products and services across the globe, through excellence in technology, based on world-class research and development.

We are responsible to the society. We shall be good corporate citizens and will be driven by high ethical standards in our practices."

8 ROLE OF CADILA PHARMACEUTICALS IN INDIAN ECONOMY

Cadila Healthcare is an Indian pharmaceutical company located in Gujarat. The company's 1QFY2010 results show the net sales at Rs880.3cr which is higher than the estimated Rs773cr. The net profit was Rs124.8cr which was increase of 39%; the increase was on account of higher sales and improvement in the OPM.

Company Size ($ Billion) Market Share (%) Growth Rate (%) Total Pharma Market 6.9 100.0 9.9 Cipla .36 5.3 13.4 Ranbaxy .34 5.0 11.5 Glaxo Smithkline .29 4.3 -1.2 Piramal Healthcare .27 3.9 11.7 Zydus Cadila .24 3.6 6.8 Source: ORG IMS

9 ORGANISATION STRUCTURE

Chairman : I A Modi

MD : Dr. R I Modi

10 FUNCTIONS OF CADILA PHARMACEUTICAL

 Agro Division's Potato Project inches towards success

With the potatoes planted across 2,000 acres at Sabarkantha and Bansakantha districts of Gujarat in October 2010 all set for harvest, the Rs 3.62 crore potato plantation project, bagged by our Agro Division from Development Support Agency of Gujarat for 2,000 farmers under Vanbadhu Kalyan Yojna inched towards success.

The objective of the project was to double the farmer's income. Yield survey conducted by scientists of Agriculture University showed the produce was at par with that of traditional potato growing areas.

Regular meetings and training of all farmers and partner-NGOs in scientific cultivation of potato, conducted by our Agro team with special contribution of Mr. Anuj Dwivedi and Mr. Bharat Patel have gone into the success of the project.

Speaking on the new identity which this success lent to Agro Division, SBU Head Dr. Geeta Patel said, "This type of project gives us lot of confidence in our knowledge and ability to translate the same in field on a large scale. Success of this project will help us establish ourselves as knowledge provider in addition to product provider. This can be a viable business model for our division."

 From nine pharmaceutical production operations in India as well as a Zydus Cadila develops and manufactures a large range of pharmaceuticals as well as diagnostics, herbal products, skin care products and other OTC products. The company also makes EverYuth Naturals Walnut Scrub & Ultra Mild Scrub -India 's leading scrub brand , EverYuth Naturals Golden Glow Peel-Off-the no. 1 in the peel-off category and a face wash range .It is also the maker of Sugar Free, India's most popular artificial sweetener, and Nutralite, India's most popular cholesterol-free margarine.

The company makes active pharmaceutical ingredients at three sites in India:

Ankleshwar plants - Zydus Cadila's plant complex at Ankleshwar in Bharuch District of Gujarat, has been producing drug material since 1972. There are around 10 plants in the complex, which is ISO 9002 and ISO 14001 certified as well as FDA Approved. Total plant capacity at Ankleshwar is around 180 million tonnes.

Vadodara plant - Zydus Cadila's plant at Dhabhasa, in Vadodara District's Padra taluka (in the eastern part of the district) in Gujarat, was commissioned in 1997 by a company called Banyan Chemicals, and acquired by Zydus Cadila in 2002. The plant has a 90 million tonne capacity. It is an FDA-approved facility that is also approved to WHO GMP guidelines.

11 Patalganga plant - Zydus Cadila acquired an API plant at Patalganga in Maharashtra state, 70 km from Mumbai, about 859 km from Nagpur, in the 2001 German Remedies deal. This plant operates to WHO GMP standards.

12 COMPETATIVE POSITION OF CADILA PRODUCTS IN INDIA/GUJARAT

A result of in-house Research and Development initiatives and collaborations with world- renowned institutions; Cadila Pharmaceuticals' product basket includes: branded and generic formulations covering more than 50 therapeutic segments; Biotechnology products and diagnostic kits, Plant Tissue Culture, etc. In the services realm, the gamut of offerings covers Clinical Research, Contract Research & Manufacturing, etc.

Cadila Pharmaceuticals is the only Indian manufacturer of Streptokinase and Hyaluronic Acid- based products. Hyaluronic Acid containing products include Visial for Ophthalmology and Halonix for intra articular use. Streptokinase is used in management of heart attack. The company also manufactures rabies immunoglobin and diagnostic kits for detection of HIV and HCV. Cadila Pharmaceuticals is working in areas of novel vaccine adjuvants, Sepsis management and therapeutic vaccine for pancreatic cancer.

Group companies also manufacture Tablet Presses, Capsule filling machines, pharma machinery parts and hospital disposables like gloves, etc.

To the World from Cadila Pharmaceuticals

1. World's first Sparfloxacin Eye Drops (Scat Eye Drops) 2. World's first parenteral formulation of Rabeprazole (Rabeloc I.V.) 3. World's first Probiotic combined with anti-infective agent (Symbiotic) 4. World's first manufacturer of a unique immunomodulator (IMMUVAC) 5. World's first whole blood, rapid HIV detection kit (NEVA HIV)

13 CHAMPION BRANDS

 ENVAS

Cadila Pharmaceuticals makes India's No.1 ACE inhibitor, Envas, which has been listed among the country's top 50 Pharma Brands, across all categories. Other CPL brands in top 300 brands of Indian Pharmaceutical Industry are Aciloc and Haem-Up.

 ACILOC

A Ranitidine preparation, Aciloc is one of India's best selling brands in this category.

 LMX, SYMBIOTIK, CLAX

Antibiotics with live Lactobacilli combination, LMX, SYMBIOTIK, CLAX are the first brands of its kind in India, for which Cadila Pharmaceuticals has applied for a worldwide patent. This unique innovation has already been granted Indian, UK and US, Eurasian & Sri Lankan patents.

 RABELOC, ACILOC RD, ZASO, MIXULIN, MONTELAST AND NODON are some of the best selling brands in their categories.

14 HEALTHCARE IN THE NETHERLANDS

Healthcare in the Netherlands can be divided in several ways: three echelons, in somatic and mental health care and in 'cure' (short term) and 'care' (long term). Home doctors ('Huisartsen', comparable to General Practitioner form the largest part of the first echelon. Being referenced by a member of the first echelon is mandatory for access to the second and third echelon. The health care system is in comparison to other Western countries quite effective but not the most cost- effective.

Healthcare in the Netherlands is financed by a dual system that came into effect in January 2006. Long-term treatments, especially those that involve semi-permanent hospitalization, and also disability costs such as wheelchairs, are covered by a state-controlled mandatory insurance. This is laid down in the Algemene Wet Bijzondere Ziektekosten ("General Law on Exceptional Healthcare Costs") which first came into effect in 1968. In 2009 this insurance covered 27% of all health care expenses. The Netherlands was ranked first in a study comparing the health care systems of the US, Australia, Canada, Great Britain, Germany and New Zealand.

For all regular (short-term) medical treatment, there is a system of obligatory health insurance, with private health insurance companies. These insurance companies are obliged to provide a package with a defined set of insured treatments. This insurance covers 41% of all health care expenses.

Other sources of health care payment are taxes (14%), out of pocket payments (9%), additional optional health insurance packages (4%) and a range of other sources (4%). Affordability is guaranteed through a system of income-related allowances and individual and employer-paid income-related premiums.

A key feature of the Dutch system is that premiums may not be related to health status or age. Risk variances between private health insurance companies due to the different risks presented by individual policy holders are compensated through risk equalization and a common risk pool. Funding for all short-term health care is 50% from employers, 45% from the insured person and 5% by the government. Children under 18 are covered for free. Those on low incomes receive compensation to help them pay their insurance. Premiums paid by the insured are about 100 € per month (about US$127 in Aug. 2010 and in 2012 €150 or US$196,) with variation of about 5% between the various competing insurers, and deductible a year €220 US$288.

From 1941 to 2006, there were separate public and private systems of short-term health insurance. The public insurance system was implemented by non-profit health funds, and financed by premiums taken directly out of the wages (together with income taxes). Everyone earning less than a certain threshold qualified for the public insurance system. However, anyone with income over that threshold was obliged to have private insurance instead.

15  History of Netherland

 2006 Reform

The Netherlands has introduced a new system of health care insurance based on risk equalization through a risk equalization pool. In this way, a compulsory insurance package is available to all citizens at affordable cost without the need for the insured to be assessed for risk by the insurance company. Indeed, health insurers are now willing to take on high risk individuals because they receive compensation for the higher risks.

A 2008 article in the journal Health Affairs suggested that the Dutch health system, which combines mandatory universal coverage with competing private health plans, could serve as a model for reform in the US.However, an assessment of the 2006 Dutch health insurance reforms published in Duke University's Journal of Health Politics, Policy and Law in 2008 raised concerns. The analysis found that market-based competition in healthcare may not have the advantages over more publicly based single payer models that were originally envisioned for the reforms:

The first lesson for the United States is that the new (post-2006) Dutch health insurance model may not control costs. To date, consumer premiums are increasing, and insurance companies report large losses on the basic policies. Second, regulated competition is unlikely to make voters/citizens happy; public satisfaction is not high, and perceived quality is down. Third, consumers may not behave as economic models predict, remaining responsive to price incentives. If regulated competition with individual mandates performs poorly in auspicious circumstances such as the Netherlands, how will this model fare in the United States, where access, quality, and cost challenges are even greater? Might the assumptions of economic theory

16 not apply in the health sector?

However, a comparison of consumer experiences over time yielded mixed results in 2009, and a 2010 review indicated it was too early to tell whether the reform has led to gains in efficiency and quality.

 Demographic Profile of netherland

 Population

16,847,007 (July 2011 est.)

 Age structure

0-14 years: 17% (male 1,466,218/female 1,398,463) 15-64 years: 67.4% (male 5,732,042/female 5,624,408) 65 years and over: 15.6% (male 1,141,507/female 1,484,369) (2011 est.)

 Population growth rate

0.371% (2011 est.)

 Birth rate

10.23 births/1,000 population (2011 est.)

 Death rate

8.85 deaths/1,000 population (July 2011 est.)

 Net migration rate

2.33 migrant(s)/1,000 population (2011 est.)

 Urbanization urban population: 83% of total population (2010) rate of urbanization: 0.8% annual rate of change (2010-15 est.)

 Sex ratio  at birth: 1.052 male(s)/female under 15 years: 1.05 male(s)/female 15-64 years: 1.02 male(s)/female 65 years and over: 0.76 male(s)/female total population: 0.98 male(s)/female (2011 est.)

17  Infant mortality rate total: 4.59 deaths/1,000 live births male: 5.08 deaths/1,000 live births female: 4.07 deaths/1,000 live births (2011 est.)

 Life expectancy at birth total population: 79.68 years male: 77.06 years female: 82.44 years (2011 est.)

 Total fertility rate

1.66 children born/woman (2011 est.)

 HIV/AIDS - adult prevalence rate

0.2% (2009 est.)

 HIV/AIDS - people living with HIV/AIDS

22,000 (2009 est.)

 HIV/AIDS - deaths fewer than 100 (2009 est.)

 Literacy definition: age 15 and over can read and write total population: 99% male: 99% female: 99% (2003 est.)

 Education expenditures

5.3% of GDP (2007)

 Maternal mortality rate

9 deaths/100,000 live births (2008)

18  Health expenditures

10.8% of GDP (2009)

 Physicians density

3.921 physicians/1,000 population (2007)

 Hospital bed density

4.25 beds/1,000 population (2008)

 The Netherlands economic overview According to the Macro Economic Outlook 2012 (MEV 2012), published by CPB Netherlands Bureau for Economic Policy Analysis today, the Dutch economy is projected to grow by 1½% during 2011 and by 1% during 2012. The economic growth is largely attributable to exports. At this moderate rate of growth, unemployment will not decrease any further and is projected to stabilize at an average of 4¼%. Purchasing power will decrease in both forecast years. The forecasted budget deficit is diminishing rapidly, from 5.1% of gross domestic product (GDP) in 2010 to 2.9% of GDP next year. This relatively gloomy picture is considered the most likely scenario based on current information, and hence the picture on the basis of which the budget has been prepared (the ‘baseline’).

These figures have taken into account the recent turmoil in financial markets, although not the possibility of a new financial crisis. The risk of a new financial crisis is nonetheless very real. The turbulence in financial markets indicates the existence of great uncertainty and the likelihood of a negative outcome is considerable. The Macro Economic Outlook 2012 therefore includes an alternative scenario in which the possible effects of a new financial crisis are illustrated. The uncertainties are too great and diverse for this to constitute a detailed scenario, however. It does give an indication nonetheless of the possible outcomes in the event a new shock, which has not yet been factored in at this moment, is delivered to the financial markets - whether in Europe, the United States or elsewher

 Overview of Industries The Netherlands industry sector is dominated by the transportation and agro-industries. Post World War II, the metallurgy industry has also picked up in the nation. Philips Electrical Company has become one of the biggest electronic companies in Europe. Unilever, another example, employs among the largest number of employees the world over. Shell, along with Royal Dutch, operates one of the largest oil refineries. The only industry to have taken a beating is the textile industry, which has been outsmarted by foreign competition and lack of modern management.

19  Overviews of Business and Trade at International Level

 Main Industry Sectors

The agricultural sector represents 3% of the country's GNP. The profits from production are high and the use of the agricultural surface area is very intensive. Nearly 60% of the production is exported, either directly or through the food industry, what makes of the Netherlands the third exporter of agricultural products in the world. Cereals, potatoes and horticultural products are the main crops. Industrial activity, practically, generates nearly a quarter of the GNP through food-processing, the petro-chemical industry, metallurgy and also the transport equipment industry. The Netherlands is also amongst the major producers and distributors of oil and natural gas. Services account for more than 70% of the national income and they are mainly centered on transportation, distribution, logistics, banking and insurances.

 Economic Overview

The Netherlands entered into recession after the second trimester of 2008, the country was strongly affected by the international crisis due to its dependence on foreign trade. Its GDP experienced a historic contraction of -4% in 2009. The revival of global trade has allowed the country to recover with a slow growth drawn by the exports in 2010, estimated at 1.8%.

The crisis plunged public finance into the red, beyond the limits of the European Stability and Growth Pact. The public deficit is estimated at 5.8% of the GDP in 2010, and the public debt is close to 65% of the GDP. The priority of the government is to consolidate the budget and its objective is to bring the deficit to 3% of the GDP by 2013. The government has established reforms intended to strengthen the financial sector and the management of the population's ageing is also essential.

The Netherlands presents high incomes per capita with an equal distribution of revenues. The unemployment rate is rising but it still remains at less than 5% of the active population.

 FDI in Figures

The Netherlands is one of the European countries that attracts most of direct foreign investment (FDI). A strong international orientation and a liberal policy towards foreign investment are the characteristics of the Netherlands' policies in this field. Many Dutch companies are multinational by nature and a large number of these are listed on the foreign stock markets. There are no regulatory restrictions on foreign direct investment. The Netherlands had shown an increase of its FDI stock until 2007; however, due to the financial international crisis, the FDI flows declined in 2008. They have begun to increase again, a trend that should remain.

The global investment report of the UNCTAD classifies the Netherlands as a front runner in what concerns countries with a high potential and a good performance for FDI.

20  FDI Government Measures

The Dutch economy is amongst the most open in the world. Since January 2007, the Dutch taxation environment for international companies has become even more attractive. The company taxation rate has dropped by 25.5%, which is well below the European Union average. The whole of the government measures can be referred to on the Netherlands Foreign Investment Agency website.

21 EXIM POLICIES OF NETHERLAND

The pharmaceutical industry is one of the leading industries in Netherland, and is soon becoming one of the most advanced countries of the world in terms of the growth of the health sector and advancements in pharmaceutical equipments and production of bulk pharmaceutical drugs. Covering many aspects of the industry, the EXIM policy is also prepared keeping in mind the interest of the pharmaceutical machines and drugs manufacturers and the Govt. of Netherland. The government is looking at exim policy options to further grow the country's thriving pharmaceutical industry and check growing examples of takeovers by foreign players.

The import and export of pharmaceutical drugs and pharmaceuticals are regulated through EXIM Policy. Netherland is now globally considered as one of the leading global players in pharmaceuticals. Europe occupies the highest share of Netherland pharma exports followed by North America and Asia. The pharma EXIM policy initiatives taken by the Government recently have led to quantitative and qualitative improvements in the Research & Development activities of the industry. The National Pharmaceutical Policy (NPP)'s objective is to ensure availability of lifesaving drugs at reasonable prices.

For a more clear idea of the export and import policy of the Indian pharmaceutical industry, check out the following:

 Customs Duty  SIC codes  HS codes

22 CONCLUSION

On this report we find that there is high scope pharmaceuticals in netherland. So cadila should expand there business in netherland. There is less competition in netherland for pharmaceutical industries so that more profitable chances for cadila by entering in pharmaceutical market in netherland.

23 SUGGESTIONS

 The EXIM policy of Netherland is good so Cadila pharmaceutical can be enter into Netherland market after passing government norms.  Population growth is average in Netherland so it will be profitable for Cadila to entered into Netherland.

24 GLOBAL / COUNTRY STUDY AND REPORT ON “HCL TECHNOLOGY”

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Faculty Guide Dipamala Santra Assistant Professor

Submitted by Patel Amita (108000592020) Patel Amit.s(108000592099) Patel Alkes(108000592018) Patel Amit.c( 108000592014) Parmar sonal p(108000592023) [Batch: 2010-12] MBA SEMESTER IV

Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012

Page 1 ACKNOWLEDGEMENT

This project is not the result of individual effort. It is a teamwork it was not is possible to complete the project alone.

There are different distinguished personalities who help us to furnish the project and we are thankful to them.

First, we want to give thanks to our university Gujarat technological university and our collage oxford school of management for giving us the opportunity to take part in this kind of project.

Next we want to give thanks to our honorable principal, Mr. Japan shah for his support last but not least we want to give thanks to all our faculties.

Page 2 PREFACE

The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the Global Country study. GCSR also helps the student to devote his/her skill to analyze the various business opportunities in various countries across the globe, to evaluate them and to provide feasible recommendations on the provided data.

We have selected The Netherlands as the country and We have studied the company HCL Technology.

Page 3 INDEX

Serial number Particular Page number Objectives of report 1 Introduction f HCL Techn0ology 5 2 History 6 3 Role of HCL in Netherland 8 4 Structure of HCL Technology 9 4.1 Capital structure 9 4.2 Organizational structure 10 5 Functions and business activities 11 6 Comparative position of HCL 12 7 Present position and trend business during last 3 to 5 years 13 8 Netherlands economic structure 14 9 Policies and norms of Netherlands including licensing, 16 permission, taxation 10 Present trade barriers for import/export 17

10.1 Import trade barriers 17 10.2 Export trade barriers 19 11 Potential for import/export in India/Gujarat market 21 12 Business opportunity for future 22 13 Reasons of expanding business in Netherlands 23 Conclusion 27 Bibliography 28

Page 4 OBJECTIVES OF THE PROJECT

 To learn how to prepare a project report of a company.  To know what can be the content of a company project report.  To analyze the comparative study of a particular company to know whether the company is a booming company or not.  To know the future prospect of the company.  It may be helpful for our future profession.

Page 5 INTRODUCTION OF HCL TECHNOLOGY

HCL (Hindustan Computers Limited) is a leading global Technology and IT enterprise whose range of services spans Product Engineering and Technology Development, Application Services, BPO Services, Infrastructure Services, IT Hardware, Systems Integration, and Distribution of Technology and Telecom products in India. The HCL Enterprise comprises two companies listed in India: HCL Technologies and HCL Infosystems. HCL Technologies is the IT and BPOservices arm focused on global markets, while HCL Info systems deals in the IT, Communication, Office Automation Products & System Integration arm focus edon the Indian market.

Date of Establishment: 1991 Revenue: 1521.55 (USD in Millions) Market Cap: 347149.393752 (Rs. in Millions) Corporate Address: 806 Siddharth, 96 Nehru Place, New Delhi-110019, Delhi Website: www.hcltech.com Business Operation: IT - Software Background Chairperson : Shiv Nadar MD : Shiv Nadar Directors : Ajai Chowdhry, Amal Ganguli, Manish Anand, P C Sen, R Srinivasan, Rick Valencia, Robin Abrams, Shiv Nadar, Subroto Bhattacharya, T S R Subramanian, Vineet Naya Financials Total Income: Rs. 69607.5 Million (year ending Jun 2011) Net Profit: Rs. 11982.8 Million (year ending Jun 2011)

Company Secretary: Manish Anand

Bankers Auditors: Price Waterhouse & Co

Page 6 History

HCL Technologies is a leading global IT services company, working with clients in the areas that impact and redefine the core of their businesses. Since its inception into the global landscape after its IPO in 1999, HCL focuses on 'transformational outsourcing', underlined by innovation and value creation, and offers integrated portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO.

HCL Technologies has portfolio of services including software-led IT solutions, remote infrastructure management, engineering and R&D services and BPO. HCL has global partnerships with several leading Fortune 1000 firms, including several IT and technology majors. It provides services to industry sectors including financial services, manufacturing, aerospace & defense, telecom, retail & CPG, life sciences & healthcare, media & entertainment, travel, transportation & logistics, automotive, government and energies & utilities.

HCL leverages its extensive global offshore infrastructure and network of offices in 26 countries to provide holistic, multi-service delivery in key industry verticals including Financial Services, Manufacturing, Consumer Services, Public Services and Healthcare. HCL Technologies is leader in providing IT services to its clients restructuring the core of their businesses.

HCL takes pride in its philosophy of 'Employees First, Customers Second' which empowers our 77,046 transformers to create a real value for the customers. HCL Technologies, along with its subsidiaries, had consolidated revenues of US$ 3.5 billion (Rs. 16,034 crores), as on 30 June 2011 (on LTM basis).

The acquisition of UK-based Axon for close to 441.1 million ponds, is expected to ramp up HCL Technologies’ client base and will have a positive effect on its profit. The company is also on the lookout for more acquisitions in the near future.

Recognition

 HCL Technologies has been named as one of Britain's Top Employers 2010 by the Corporate Research Foundation (CRF) Institute, for the fourth consecutive year.  HCL Technologies has been conferred with the prestigious ‘Golden Peacock Innovation’ Award for its MTaaS™ (a Business Service Management centric service delivery platform) offering in the IT Sector category in October, 2009.  HCL Customer Standard Parking Wins Oracle’s ‘Empower the Green Enterprise’ Award  HCL Receives 6 HR Congress Awards 2008 – a recognition for having great human resources practices  India’s Most Preferred Personal Computer Brand – CNBC AWAAZ Consumer Award 2007  HCL Technologies (HCL) was named Meritorious Performance Supplier in Sun Microsystems' 2007 Supplier Awards program. The award recognizes companies that

Page 7 make outstanding contributions to Sun's record of delivering superior technology, quality service and excellent value to its customers.

Page 8 ROLE OF HCL IN NETHERLAND (EUROPE)’ S ECONOMY

HCL commenced its journey in Europe in 1999 providing integrated suite of services including IT Services, Remote Infrastructure, Engineering and R&D and BPO services. Its ‘think global, act local’ philosophy makes it a commercially innovative company with local autonomy to structure deals. Through the years HCL has won several important European contracts placing it at the top of the European service providers’ list. Today, HCL Europe is spread across 13 countries, houses 9 global centers of excellence, employs more than 85% local European professionals and provides transformational value for over 200 customers in Europe.

Performance so far:  HCL’s Europe business contribution has increased to 27% of the company’s revenues, making it the fastest growing geography for HCL.  CY 2011 revenue hits USD 1048.6 Million  HCL Europe’s growth in the last five years has been 26.3% CAGR (from CY06 to CY 11)  The #1 in benefits led SAP services in the world  HCL undertakes a £441.1 million acquisition in 2008 – the largest acquisition by an Indian IT company  In 2012, HCL announces to create 10,000 jobs across US and Europe over 5 years

Page 9 STRUCTURE OF HCL TECHNOLOGY

Capital Structure

From Authorized Paid Up Paid Up Class Of Issued Capital Paid Up Year - Capital Shares Capital Share (Crores) Face Value To Year (Crores) (No’s) (Crores) 2010 – Equity 688,688,5 2011 150.00 137.74 2.00 137.74 Share 24 2009 – Equity 678,783,8 2010 150.00 135.76 2.00 135.76 Share 12 2008 – Equity 670,256,6 2009 150.00 134.05 2.00 134.05 Share 00 2007 – Equity 666,340,2 2008 150.00 133.27 2.00 133.27 Share 72 2006 – Equity 663,683,1 150.00 132.74 2.00 132.74 2007 Share 16

Page 10 Organization Structure of HCL Technology

Page 11 FUNCTIONS & BUSINESS ACTIVITIES

HCL provides services across the following business lines -

 Engineering and R&D Services (ERS) - offering services in Hardware, Embedded, Mechanical and Software Product Engineering.

 Enterprise Transformation Services (ETS) - offering services in the areas of Independent Verification and Validation, Process Transformation, Data Management, Integration Services, Architecture Services, Disruptive Technology Services, IT Strategy, and Change Management.

 Business Processing Outsourcing (BPO) - division of HCL Technologies Limited has delivery offices across India, UK and USA.

 Enterprise Application Services (EAS) - focuses on areas like in ERP, SCM, CRM, HCM, EPM, BI and Middleware. This group is now part of HCL AXON, subsidiary of HCL Technologies, formed after HCL Tech acquired Axon Group plc for £440m cash offer in 2008.

Product Name Year Month Sales Sales % of Quantity Value(Rs.Million) STO Income from Software 2011 06 0.00 66108.00 97.30 Services Software Licenses 2011 06 0.00 606.90 0.89 (Unlimited Users) Others 2011 06 183666.00 464.00 0.68 Routers 2011 06 943.00 319.50 0.47 Switches 2011 06 506.00 193.30 0.28 Servers 2011 06 463.00 145.60 0.21 Storage Devices 2011 06 17.00 107.50 0.16

The company acquired Capitalstream, a US BFSI product company for US$40 million in February 2008. Capitalstream's Finance Center product is an addition to HCL's current product addressing the BFSI market - Penstock, the product that HCL launched in 2007.

On 15 December 2008, HCLT acquired the UK based AXON Group for US$658 million, which was renamed HCL Axon.

Page 12 COMPERATIVE POSITION OF HCL

Company Sales Current Change P/E Market 52-Week (Rs.Millio Price (%) Ratio Cap.(Rs.Millio High/Low n) n) CS 388585.40 1201.00 0.76 21.50 2359332.05 1279/903 Infosys. 312540.00 2358.30 o.oo 17.19 1372524.55 3020/2169 Wipro 263005.00 407.00 0.80 21.29 997583.59 454/310 HCL Tech. 67944.80 505.75 0.91 21.09 353729.44 527/360 Oracle Finl. 23605.06 2576.00 1.59 23.38 216261.82 2766/1699 Service Tech Mahindra 49655.00 699.10 -1.42 15.78 88780.75 798/524 Mahindra 47761.00 75.50 -0.26 20.61 88671.72 94/62 Satyam Mphasis 34041.30 366.00 0.97 10.68 76969.26 488/277

Patni Computer 21516.66 506.30 0.05 14.41 68826.48 521/250 Sys. Info Edge 2936.21 768.00 0.61 37.74 41363.23 800/548 Hexaware Tech. 6785.80 129.30 1.53 14.25 38349.06 134/61 Financial 3308.89 685.15 -0.05 40.72 32024.58 959/518 Technology Core Education 5155.92 275.40 -0.58 17.36 31261.07 322/245 & Tec

Page 13 PRESENT POSITION AND TREND OF BUSINESS DURING LAST 3 TO 5 YEARS

 HCL ranked in Top 6 Global Service Providers by TCV across US, EMEA and APAC as per The TPI Index, Third Quarter 2011. Release date: 13th October 2011  HCL recognized for its leadership innovations at CeBIT 2011. CeBIT, the world's largest trade fair showcasing ICT recognizes the “revolutionary corporate philosophy of Employees First, Customers Second"  HCL won the Outsourcing Service Provider of the Year 2010 by the National Outsourcing Association (NOA)  HCL recognized for its employee centric initiatives by Thinkers50 in 2011. Vineet Nayar has been cited as a new generation of gurus and is the highest placed practitioner in the Thinkers50 list.  HCL Named as one of Britain’s Top Employers for 2011 for the 7th time in a row, by CRF UK  Received the European HCM Excellence Award 2011 in the “Business HR Champion Category” at the Human Asset 2011 Summit, in recognition of excellence in Human Capital Management practices  Awarded the ‘Payroll Giving’ Award (Bronze) for fostering a culture of philanthropy at the workplace. [The award recognizes employers who have succeeded in generating sustainable income sources for UK charities through payroll giving]  HCL was presented with the SAP® Mobility Showcase Award for SAP partners at the SAPPHIRE® NOW conference in Madrid. This award was presented in recognition of HCL’s expertise and capabilities in enterprise mobility applications space  HCL wins FT Arcelor Mittal Boldness in Business Award in 2009  HCL Wins The International Investor Of The Year Award. The award was presented by the Greater Paris Investment Agency in recognition of the investment made by HCL in the greater Paris area in 2008  HCL was recognized as Top Investor in the UK by the UK Trade and Investment Board in 2006

Page 14 THE NETHERLANDS ECONOMIC STRUCTURE

The Netherlands economic structure runs on the principles of an open economy. The Netherlands is a prosperous economy that depends on foreign trade. Netherlands’ economic structure features a stable industry sector, low inflation and unemployment rate and an impressive current account surplus. According to the 2009 statistics, the current account balance is $33.72 billion.

 Primary Sector

The service sector is the most dominant and biggest contributor to Netherlands’ economy. The service sector contributes as much as 73.7% to the GDP (2009 figures) and generates employment opportunities for 80% of the workforce (8.33 million).

The service sector includes financial services, transportation, goods distribution and tourism. The computer related industry is also a well developed segment for the sector. The telecommunication industry holds a lot of potential as well. The latest trend in the service sector seems to be mergers to consolidate resources and optimize usages

 Secondary Sector

Netherlands’ industrial sector is a well diversified segment with a variety of industries, such as petroleum refining, food processing, chemicals and electrical machinery. Other prominent industries are:

 Agro-industries  Metal and engineering products  Construction  Microelectronics  Fishing

The industry sector contributes 24.4% to the GDP and employs almost 18% of the workforce. The government is taking steps to encourage the growth of new industries in areas that are economically depressed. Specific measures have been taken to encourage growth in biotechnology, aerospace industry and microelectronics. Being a huge economy, FDI keeps coming in and stood at $661 billion in 2009.

Page 15  Tertiary Sector

The agriculture sector remains a well mechanized sector that employs almost 2% of the workforce and contributes to exports as well. The various goods that the sector produces are:

 Grains  Potatoes  Sugar beets  Fruits  Vegetables  Livestock

However, as tourism and the demand for services decreased during the recession years, the unemployment rate grew from 4% to 5% in 2009. Investments remained low as well, at just 19.4% of the GDP. The government has, therefore, responded with more flexible norms and regulations. The stern financial policies have been abandoned and the government is accelerating the projects to gather some growth momentum.

Page 16 POLICIES AND NORMS OF NETHERLAND INCLUDING LICENSING/ PERMISSION/ TAXATION, ETC.

 Political, Administrative and Legal System:

 The Netherlands is a constitutional monarchy and has a parliamentary democracy. The Constitution (1814) is the most important document of state in the Netherlands. It contains the fundamental rules for the political and legal structure of the Netherlands and establishes the fundamental rights of its citizens. It is the highest national law of the state; other laws are required to comply with its provisions.

 Political elections are held every four years. These elections are to the Lower House of Parliament, also called the Senate (Eeerste Kamer), a directly elected assembly of 150 people. The Upper House, also called the House of Representatives (Tweede Kamer), which has 75 members, is elected by the executive bodies of the provincial councils.

 As regards the courts, the Netherlands does not have a jury system. The district courts deal with the majority of civil cases. The courts of law deal with the more important (criminal) cases, while appeals against a judgment of a district court are also heard by the courts of law. Further appeal against a judgment of the courts of law lies with one of the five courts of appeal in the Netherlands.

 The Tax Structure of Netherland:

Profitability is your company's first priority. Netherlands' corporate tax structure advantageous to achieving business goals.

For centuries, the Netherlands has been a nation of traders. To ensure that this longstanding tradition endures, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands.

Page 17 The Dutch tax system has a number of features that may be very beneficial in international tax planning.

 Relatively low statutory corporate income tax rate of 25% (20% for first 200,000 Euro)  Possibility of obtaining advance tax rulings from the Dutch tax authorities giving certainty on future tax position  Innovation box resulting in an effective corporate tax rate of 5% for qualifying profits  R&D allowance for qualifying R&D wage costs (WBSO)  Tax deduction facility for R&D operating costs and investments in R&D assets (RDA)  Favorable participation exemption regime  Fiscal unity regime providing for a tax consolidation of companies within a group and therefore to freely offsetting profits and losses among group members  Transfer pricing practice in accordance with OECD Transfer Pricing Guidelines and the possibility to obtain an Advance Pricing Agreement (APA)  The possibility to carry forward losses for nine years and to carry them backward for one year  Wide tax treaty network to avoid double taxation and reducing withholding taxes on dividends, interests and royalties (for interest and royalties often to 0%)  No statutory withholding tax on outgoing interest and royalty payments  Favorable tax treatment for foreign employees (30% tax ruling)  VAT deferment upon import: no upfront payment of VAT  Dutch Tax Authorities: access to the tax inspector  Dutch Customs Authorities: practical and pro-active approach

Page 18 PRESENT TRADE BARRIERS FOR IMPORT/EXPORT

IMPORT TRADE BARRIERS:

Trade barriers are government actions, especially tariffs, import quotas, and assorted non- tariff regulations and restrictions that are intended to increase net exports by restricting imports. By increasing net exports (and creating a more "favorable" balance of trade), the domestic production of a nation increases, which then increases domestic income and employment.

 Tariffs

Tariffs are simply taxes placed on imports. They work like any other taxes. A tariff is added to the price of the imported good. The resulting price of the import is thus higher, which tends to decrease the quantity purchased. And if fewer imports are purchased, then more domestic production is sold.

Tariffs are commonly imposed if domestic producers are able to convince government policy makers to compensate for foreign producers who unfairly gain a competitive advantage due to low foreign wages, dumping practices, or low production costs. However, tariffs are also imposed as a general means of limiting imports.

Tariffs are often the trade barrier of choice because tax revenue is paid to the government treasury. Not only do domestic producers benefit from trade protection, but the government sector benefits from extra tax revenue, revenue that in principle could be used to compensate domestic consumers that might be harmed by the trade barriers due to higher prices and restricted access to production.

 Import Quotas

The second of three trade barriers designed to restrict imports and promote exports is quotas on imports. In general, a quota is simply a quantity restriction placed on a good, service, or activity. For example, employers often face hiring quotas for different demographic groups and sales representatives often have quotas for sales activities. Import quotas are then merely legal restrictions on the quantities of imports that are imposed by the domestic government.

Import quotas can be established as a simple aggregate, presumably satisfied on a first-come- first-serve basis. Once the total is reached, then no more imports of the particular good are allowed. Alternatively, the total quota can be divided among foreign producers, perhaps pro- rated based on past imports.

Import quotas are imposed based on any of the justifications for trade barriers, but it is particularly important when it comes to national security. If, for example, the military relies on a particular piece of computer equipment for missile guidance systems, then reliance on

Page 19 any foreign imports could be problematic. A "zero" import quota might be the best trade barrier policy.

 Non-tariff Barriers

The third of three common trade barriers is assorted non-tariff barriers. These non-tariff barriers primarily include government regulations applied to specific products. The regulations might apply to production techniques, product safety, environmental quality, or ingredients and other inputs. These regulations might reflect the consumer preferences of the domestic economy or unique production techniques available only to domestic producers.

If, for example, domestic consumers value environmental quality or product safety, then government regulations preventing foreign imports that do not meet domestic standards might be imposed. Alternatively, domestic production relies on a unique naturally occurring input, then government regulations preventing foreign imports that do not use this input might be imposed.

While these non-tariff barriers are often justified to protect domestic consumes, they are also just as often imposed to prevent competition for domestic producers.

EXPORT TRADE BARRIERS:

The UK Strategic Export Control Lists form the basis of determining whether any products, software or technology that you intend to export are 'controlled' and therefore require an export license.

The lists include reference to a wide range of items that could be used for military purposes, for torture or capital punishment or for the purposes of developing or manufacturing chemical, biological or nuclear weapons.

If your items are referenced on the Control Lists (i.e. listed under a Control List entry or 'rating') then you will need to apply for license from the Export Control Organization (ECO), part of the Department for Business, Innovation and Skills (BIS). The ECO is the UK government's regulatory authority for export licensing of strategic goods.

You should also note that if your goods are not listed on the UK Strategic Export Control Lists, that the ECO has the power to invoke 'End-Use Controls' if there are any specific concerns about military or weapons of mass destruction (WMD) end-use.

This guide will explain how the Control Lists are organized, how they are maintained and updated, and where you can seek further help and advice.

Page 20  Export Control Act 2002 and Export Control Order 2008

UK export controls are designed to restrict the export and communication of sensitive technology or strategic goods, with the aim of preventing weapons of mass destruction (WMD) proliferation and countering international threats such as terrorism. The controls apply equally to the academic community as to any other exporter, and cover physical export, electronic transfer, non-electronic transfer (which may include verbal), or by any other means. Where a transfer or export falls under one or more of the Controls a license may be required in order to continue, or extreme circumstances the transfer may not be able to take place. Export controls and any licenses required are administered by the Export Control Organization (ECO). It should be noted that failure to obtain an appropriate license to export controlled goods may result in a criminal offence being committed.

POTENTIAL FOR IMPORT/EXPORT IN INDIA/ GUJRAT MARKET Page 21 The economic needs of the country, effective use of foreign exchange and industrial as well as consumer requirements are the basic factors which influence India's import policy. On the import side the policy has three objectives:

1. To make necessary imported goods more easily available, including essential capital goods for modernizing and upgrading technology; 2. To simplify and streamline procedures for import licensing; 3. To promote efficient import substitution and self-reliance.

There are only 4 prohibited goods: tallow fat, animal rennet, wild animals and unprocessed ivory. There is a restricted list, but most of the restrictions are on grounds of security, health and environmental protection or because the goods are reserved for production by small and tiny enterprises, which are home-based or village-based and which require low skills and employ a large number of people. But the policy of restricting import of consumer goods is changing.

The Indian government's clearly laid down policy is to achieve, through a series of progressive steps, the average tariff levels prevalent in the ASEAN region. The basic customs tariff rate now ranges from 0 to 40% plus additional duty of 2%; the average rate is about 30%.

Imports are allowed free of duty for export production under a duty exemption scheme. Input-output norms have been specified for more than 4200 items. These norms specify the amount of duty-free import of inputs allowed for specified products to be exported.

There are no quantitative restrictions on imports of capital goods and intermediates. Import of second-hand capital goods is permitted provided they have a minimum residual life of 5 years. There is an Export Promotion Capital Goods (EPCG) Scheme under which exporters are allowed to import capital goods (including computer systems) at concessionary customs duty, subject to fulfillment of specified export obligations. Service industries enjoy the facility of zero import duty under the EPCG Scheme. Likewise, hospitals, air cargo, hotels and other tourism-related industries. Software units can use data communication network to export their products.

BUSINESS OPPORTUNITY IN FUTURE

Page 22 HCL has taken some major steps to increase Business worldwide.

These are as follows:

I. HCL Technologies, India’s fourth-largest information technology (IT) services company, is understood to have bagged a large outsourcing deal from Swiss banking major, Union Bank of Switzerland (UBS). The multi-year contract is estimated to be in the range of $250-300 million, thus making it the largest contract for the company in the banking, financial services and insurance (BFSI) space.

II. HCL Technologies (HCL), a leading global IT services provider, and Cisco Systems, Inc. a global leader in information technology products, today announced that they are jointly creating vertical solutions. First of these solutions is targeted at the financial services industry to improve the end-customer experience.

III. Under ERS, clients outsource their end-to-end product development with focus on business impact. Typically, the client gives the prototype of a product, which will be developed by HCL. Also, HCL develops and products, patents it and delivers it to clients who use their labels in the final product.

IV. There has been significant vendor churn in the last few months amid global economic uncertainties led by the Euro zone debt crisis, Vineet Nayar, Vice Chairman and CEO of HCL Technologies said on Monday.

V. Industry body Nasscom had forecast last month that IT services exports would grow more slowly for fiscal 2013. There is a lot of vendor churn in the current environment, as many companies review IT spends and consolidate vendors.

VI. Nayar told CNBC-TV18 that USD 43 billion worth of contracts are coming up for renewal in calendar 2012, and he sees 25-30% of contract renewals coming to new IT vendors.

VII. The expectations have been there for many years now. NASSCOM has clearly expressed its opinion that it is one of the few sectors, which are creating a significant amount of jobs. Therefore, the government has to see it as a sector to invest in to create competitive advantage rather than the sector to harvest. REASONS OF EXPANDING BUSINESS IN NETHERLAND

Page 23  The Dutch Economy:

The Netherlands is one of the world’s top ten economies in export volume and ranks among the top twenty for GDP, despite being geographically one of the smallest countries in the world.

 Gateway to Europe:

The Netherlands owes its high rankings in large part to its advanced transport infrastructure – with the port of Rotterdam and Schiphol Airport as its hubs – and its highly developed telecoms infrastructure. Rotterdam is Europe’s largest seaport and the fourth largest in the world in terms of container activity, while Schiphol is Western Europe’s fourth largest airport. Together, they have helped build the Netherlands’ reputation as ‘the gateway to Europe’.

 Investment from abroad:

The Netherlands has long been viewed as an attractive investment opportunity. The country offers an excellent entry point to business in the European Union because of its stable and flexible labor market, its central geographical location and excellent infrastructure, its well-educated and multilingual work force and the considerable expertise available here.

 Expats :

Just as many companies decide to set up European operations in the Netherlands, foreign visitors are also often enticed to stay and find jobs and accommodation, particularly since the EU’s internal borders have opened. The Dutch government has introduced tax measures that make it attractive for expats to work here, and bureaucratic requirements have been simplified, making it easier for employers and employees to acquire the right papers.

 Randstad:

Page 24 After Paris, London and Milan, the Randstad (the conurbation that comprises Amsterdam, The Hague, Rotterdam and Utrecht) is the largest economic urban area in the European Union in GDP terms. This is largely thanks to the strong presence of financial and commercial services, which are key drivers of the Dutch economy.

 An open economy is a dependent economy:

The Netherlands has developed into a well-diversified economy, with strong services and business sectors. The Dutch economy has been a free-market system for the last two decades, with the government actively reducing its role to regulation and taxation. The economy is also characterized by moderate unemployment and a sizeable current account surplus.

However, a range of factors influence its performance. One is the relative significance of trade, which accounts for 60 percent of GDP. This makes the Netherlands – despite the relative resilience of its economy - highly dependent on the health of the wider global economy and therefore susceptible to its fluctuations. Another factor – one that may mitigate the effects of any upswing in the world economy – is the relatively high cost of labor (wages and pension contributions). The global economic downturn adversely affected the Dutch economy, which went into recession in 2009, contracting by 4 percent. It is expected that the economic recovery will be slow, with estimated growth to be around 1.5 percent until 2013.

 International trade:

Around 80 percent of Dutch exports go to other nations within the EU, and 70 percent of goods imported into the Netherlands come from the EU. Germany is the Netherlands' most significant export and import partner, receiving around 25 percent of the Netherlands’ exports and supplying around 17 percent of the Netherlands’ total imports.

Trade activity is highly developed, with special focus on food processing, chemicals, oil refinery and electrical machinery. The agricultural industry is highly mechanised, and although the sector employs a very low percentage of the work force, it produces large surpluses for export and ranks the third highest worldwide in terms of exports. One of the most famous Dutch exports is flowers. The Netherlands exports four billion flower bulbs a year, mostly tulips. 60 percent of these go to Germany, the UK, France and Japan. The US tops the list of individual customers, importing some 900 million bulbs a year.

The government does not discriminate between foreign and domestic companies, allowing foreign investors access to the same privileges and obligations as their Dutch

Page 25 counterparts. The Netherlands Foreign Investment Agency (NFIA) assists foreign firms to invest in the Netherlands.

 Sectors:

The Netherlands’ single most dominant sector is that of business services, which accounts for approximately two-thirds of both its GDP and workforce. Mineral extraction, especially the production of natural gas, is another prominent sector.

The services sector has shown marked growth, while agriculture and industry have declined in their percentage contribution to GDP. Nearly 80 percent of the Dutch workforce is engaged in the services sector, in areas such as transportation, financial and business services (including banking and insurance), and goods distribution.

Other sectors that contribute consistently to the Dutch economy include retail, restaurants, repair services and health care. Important industrial activities include food processing, chemicals, oil refining and electrical machinery. The agricultural and food sector is also a vital part of the Dutch economy, generating approximately 10% of GDP. The Netherlands exports 75% of its agricultural produce.

 Information and communications technology (ICT):

The Netherlands is the sixth largest ICT market in the European Union and has one of the best information technology (IT) and telecoms infrastructures in Europe. The government is committed to growing the ICT sector through investment, cooperation and research. On a global scale, the Netherlands ranks second in broadband networks, third in e-Readiness, fourth in terms of ICT services exports and fifth in the ICT Development Index of the International Telecommunication Union. Opportunities exist in software and computer services in particular, as well as in data communications, network equipment and consumer products.

In the software market, the Dutch are interested in innovative solutions and are happy to deal with foreign suppliers (currently 65 percent of software is imported). Areas of opportunity include security software, internet software and services, and game software. Particular potential exists with small and medium sized companies. Growth in e- commerce and Internet usage has also driven an increase in the services market, creating opportunities in consulting, security services, desktop and network management, and application hosting and outsourcing.

Page 26 CONCLUSION AND SUGGESTIONS

Today, it has grown to cover most aspects of computing and technology. The reason why it has catapulted in importance is due to the improving accessibility, awareness and utility of technology. It is a common fact that a country’s IT potential is paramount for its march towards global competitiveness, healthy GDP and defense capabilities.

There are various reasons which are enough for HCL Technology to expand its business in Netherland

 Compared to most other European countries Netherland has a very favorable Tax structure.  The Country is influencing the Indian companies to invest in Netherland, like they are participating in incoming missions to contact with the Indian companies.  Netherland is gateway of Europe. So, if HCL expands its business in Netherland, it will be a great opportunity for the company to expand business in rest of Europe.

Page 27 BIBLIOGRAPHY

www.shine.com www. Icicidirect.com www.hcl.com

Page 28 A Global country Study report on “ING bank Netherlands”

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Faculty Guide Mr. Rupesh Patel (Assistant Professor)

SUBMITTED BY: 1> Patel Dharmesh. K (108000592005) 2> Patel Hitesh. B (108000592095) 3> Patel Jatin .M (108000592106) 4> Patel Hiren .P (108000592049) 5> Patel Jayesh .N (108000592033)

Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad April, 2012

1 ACKNOWLEDGEMENT

This Project has been made possible through the direct and indirect Co-operation of various persons, who have inspired us at every step of my work. It is a matter of pride for us to acknowledge my profound gratitude to Mr. Rupesh Patel , Oxford School of Management, who is our guide and always facilitates us in gaining practical knowledge.

And above all, we are beholden to our Parents and other family members for their blessing and encouragement in completing this task.

1> Patel Dharmesh. K (108000592005) 2> Patel Hitesh. B (108000592095) 3> Patel Jatin .M (108000592106) 4> Patel Hiren .P (108000592049) 5> Patel Jayesh .N (108000592033)

2 PREFACE

The research provides an opportunity to a student to demonstrate application of his/her knowledge, skill and competencies required during the Global Country study. GCSR also helps the student to devote his/her skill to analyze the various business opportunities in various countries across the globe, to evaluate them and to provide feasible recommendations on the provided data.

We have selected The Netherlands as the country and We have studied the company ING bank.

3 Index

Sr.No. Title Page No.

1 Introduction 5

2 Netherlands – Outline 7

3 Reason to invest in Netherlands 8

4 About ING Group 9

5 Global Headquarters 10

6 Divisions 13

7 ING in India 14

8 ING investment management in India 16

9 Banking industry in netherlands 19

10 Conlusions 22

4 1. INTRODUCTION

About ING Group

ING Group is a global financial institution of Dutch origin with 120,000 employees. ING offers banking, insurance and asset management to more than 60 million clients in over 50 countries. The clients are individuals, families, small businesses, large corporations, institutions and governments. ING comprises a broad spectrum of prominent businesses that increasingly serve their clients under the ING brand.

Key to ING's retail business is its distribution philosophy of 'click-call-face'. This is a flexible mix of internet, call centres, intermediaries and branches that enables ING to deliver what today's clients expect: unlimited access, maximum convenience, immediate and accurate execution, personal advice, tailor-made solutions and competitive rates. ING's wholesale product offering focuses strongly on its strengths in employee benefits/pensions, financial markets, corporate banking and asset management.

5 6 2. NETHERLANDS - OUTLINE  1st in broadband connections globally.  1st in commodity trading globally  1st in global connectedness  1st most enterprising nation in Europe  2nd most wealthy country in Europe  3rd best country to live worldwide  3rd largest non-banking sector worldwide  4th (leasing, brokers, securitizations, money markets)  5th best ICT infrastructure worldwide  6th highest amount of innovative companies worldwide  7th largest banking sector globally  7th most developed financial sector globally  7th most stable financial centre globally  7th most competitive country worldwide  8th in GDP per capita globally  8th in world best universities  9th worldwide amount of company global headquarters  10th most open economy for international trade worldwide

7 3. Reason to Invest in Natherland

The Netherland provides strategic location from which to survey in market within current and future Europian union the middle East Asia and Africa. The centralocated geographical position of the Natherlands, combine with accessibility and an excellent infrastructure, the quality of the workforce, the linguistic skill and the attractive tax environment are some of the key reason why numerous European American and Asian companies have established facilities in the Natherlands. Over the past few years a great number of foreign financial companies, including ICBC, Britnsurance, Saxo Bank Bank of Beijing and Chaabi Bank and smaller companies like cavanagh Capital, Dynamic Creditr and Boston Alexander have chosen to set up and office here.

8 4. About ING Group

ING Group is a global financial institution of Dutch origin with 120,000 employees. ING offers banking, insurance and asset management to more than 60 million clients in over 50 countries.The clients are individuals, families, small businesses, large corporations, institutions and governments. ING comprises a broad spectrum of prominent businesses that increasingly serve their clients under the ING brand.

Key to ING's retail business is its distribution philosophy of 'click-call-face'. This is a flexible mix of internet, call centres, intermediaries and branches that enables ING to deliver what today's clients expect: unlimited access, maximum convenience, immediate and accurate execution, personal advice, tailor-made solutions and competitive rates. ING's wholesale product offering focuses strongly on its strengths in employee benefits/pensions, financial markets, corporate banking and asset management.

Insurance

In 1845 the fire insurance company the Assurantie Maatschappij tegen Brandschade de Nederlanden van 1845 (Fire insurance company of the Netherlands established 1845) was founded and grew to be the first insurance company with branches outside the Netherlands, of which it had 139 the world over by 1900. Two decades later in 1863 the life insurance company Nationale Levensverzekerings Bank (National Life Insurance Bank) was founded in Rotterdam. These two insurance companies would merge to form the combined insurance company the Nationale-Nederlanden in 1963. The combined insurance company would expand significantly during the 1970s and 1980s. Banking

In 1881 the Dutch government created the Rijkspostspaarbank a postal savings system to encourage workers to start saving. Four decades later they added the Postcheque and Girodienst services allowing working families to make payments via post offices. Separately in 1927 the Dutch government initiated a reorganisation of Dutch banks which resulted in the creation of the Nederlandsche Middenstands Bank (NMB). NMBs focus was retail banking in the Netherlands and abroad.

In 1986 the post office banking services were privatised as Postbank N.V. and three years later it would merge with NMB bank to form NMB Postbank.

9 Merger of banking and insurance

In 1991 the banking business of NMB Postbank and the insurance business of Nationale- Nederlanden were merged to create ING Group, after changes in regulation that allowed banks and insurance businesses to work together.

Overseas expansion

ING Group expanded its international business through a number of acquisitions through the 1990s including Belgium bank Bank Bruxelles Lambert (BBL) in 1998, US based insurance company Equitable of Iowa and the comercial bank Furman Selz. It also acquired Frankfurt based BHF-Bank in 1999, although disposed of this later. It increased its Latin American and Asia Pacific's insurance businesses with the acquisition of ReliaStar and Aetna's Financial Services unit. It also acquired the Polish Bank Śląski and Mexican insurance company Seguros Comercial América.

However it was the 1995 purchase of Barings Bank after its dramatic failure that saw of ING Groups investment banking business boosted significantly.

To expanding its retail banking business overseas, rather than create a branch network, it used the direct banking business model it had develop with NMB Postbank to launch an overseas direct banking businesses called ING Direct. The first of these was set up in Canada in 1997, this was soon followed in a number of other countries including the US, UK, Germany, France and Australia. The no frills high rate savings accounts that could only be accessed on-line were a successful venture and spawned a number of similar services from rival banks.

In the late-2000s financial crisis ING Group, together with all other major banks in the Netherlands, took a capital injection from the Dutch Government in 2008 as part of its response to the crisis. This support increase INGs capital ratio above 8%, however as a condition of Dutch state aid, the EU demanded a number of changes to the company structure. This resulted in divestiture of a number of businesses around the world, which included insurance businesses in Canada, Australia and New Zealand and the ING Direct unit in the US. ING Group had paid back the Dutch government capital injection by Dec 2009.

10 5. Global headquarters

ING House, ING headquarters in Amsterdam

The Group's corporate headquarters, ING House, is located in the business district of Zuidas in Amsterdam, Netherlands. It was designed by Roberto Meyer and Jeroen van Schooten and was officially inaugurated on September 16, 2002 by Prince Willem-Alexander of the Netherlands. The light-infused building features a 250-seat auditorium, foyer, restaurant, and library. The building also houses an extensive art collection.

11 6. Divisions

Retail banking

ING offers retail banking services in the Netherlands, Belgium, Luxembourg, Poland, Romania, Turkey, India, Thailand and China. Non-retail private banking services are offered in the Netherlands, Belgium, Luxembourg, Switzerland and various countries in Asia and Central Europe.

In the Netherlands, ING is the largest retail bank by market share, holding 40% of current account deposits.[9] ING is followed by Rabobank (30%), ABN AMRO (20%), and others (10%).

Outside of the Benelux, ING's current focus is on Central & Eastern Europe, as well as certain high-growth regions in Asia. In India, ING has a 44% stake in ING Vysya Bank and is the Indian bank's largest shareholder. In China, ING has a 17% stake in the Bank of Beijing, the largest urban commercial bank in China. In Thailand, ING has a 30% stake in TMB Bank, a universal banking platform with a nationwide network.

ING Direct

ING Direct is the Group's brand for a branchless direct bank with operations in Australia, Austria, Canada, France, Germany, Italy, Spain, the United Kingdom and the United States. It offers services over the web, phone, ATM or by mail. The service currently focuses on simple interest-bearing savings accounts for retail customers. ING Direct Italy is currently opening its own "bank shops" in the major towns, where customers can operate services on usual web channels, assisted or not by branch operators, and use advanced teller machines for cash and check transactions.

ING Direct Canada

ING's history in Canada goes back to 1997 when it founded ING Direct Canada. As recently as July 2011, ING Direct Canada had over 1.7 million clients, employed over 900 people and had over $37.6 billion in assets. ING Direct Canada has five 'Save Your Money Cafés' in the major cities of Toronto, Montréal, Calgary and Vancouver. Recently, ING Direct Canada announced the closure of their bilingual (French & English) office located in Ottawa Ontario Canada.[citation needed] and moved its operations to Moncton New Brunswick.

Its products include savings accounts, tax-free savings accounts (TFSAs), mortgages, retirement savings plans (RSPs), guaranteed investments (GICs), mutual funds, business accounts and a no- fee daily checking accounts.

12 ING Direct Canada is a member of the Canadian Bankers Association (CBA) and registered member with the Canada Deposit Insurance Corporation (CDIC), a federal agency insuring deposits of all Canada's chartered banks. ING Direct Canada operates as Banking Institution #614, Transit #00152.

As of February 2009, ING Canada (the insurance arm) is no longer a subsidiary of ING Group. ING Group's 70% equity interest was spun off for $2.2 billion. The company (which has an 11% share of Canada's property and casualty insurance market) was then renamed Intact Financial Corporation in May 2009. ING Group still operates ING Bank of Canada, also known as ING Direct Canada.

ING Direct United States

Part of ING at night in Minneapolis, Minnesota in the United States

ING Direct was founded in 2000, with its headquarters in Wilmington, Delaware. ING Direct is a member of the Federal Deposit Insurance Corporation (FDIC).

In September 2007, ING Direct acquired 104,000 customers and FDIC insured assets from a failed virtual bank NetBank.[13] Two months later, ING Direct acquired online stock broker Sharebuilder.[14]

In June 2011, ING announced an agreement to sell ING Direct USA for a total consideration of $9 billion (EUR 6.3 billion) to Capital One Financial Corporation, a leading US-based financial holding company. Under the terms of the agreement, ING will receive $6.2 billion in cash and $2.8 billion in the form of 55.9 million shares in Capital One. With its pro forma 9.9% stake, ING will become the largest single shareholder in Capital One. The sale of ING Direct USA to Capital One is expected to close in the fourth quarter of 2011 and is subject to regulatory consent. After closing, ING has the right to be represented by one member of the Board of Directors of Capital One.[15]

The sale was completed on June 16, 2011 with the CEO of ING Group at that time Jan Hommen saying the sale "marks a further important step in the restructuring of ING Group. Yet at the same time we are saying goodbye to a very successful business and a dedicated team ...".

ING Direct UK

ING Direct began operations in the UK in May 2003 and has over one million customers. Operations are based in Reading, where the company head office is situated as well as an office based in the city of Cardiff. The bank markets itself as offering good customer service and high

13 interest rates, which are usually higher than its high street competitors, but not always top of comparison tables.[17] The bank has picked up awards for its customer services and mortgage product in 2008 and 2009.[18]

On October 8, 2008, ING purchased the savings accounts of the collapsed Icelandic bank, Kaupthing Singer & Friedlander, the UK Treasury used the Banking (Special Provisions) Act 2008 to transfer the Kaupthing Edge deposit business to ING Direct.[19] Through this, ING Direct took over responsibility for £2.5 billion of deposits of 160,000 UK customers with the Icelandic bank Kaupthing Edge. Some customers were dissatisfied[20] after ING lowered the exceptional high rate the collapsed Kaupthing was previously paying

ING Directs products in the UK include Savings Accounts, Cash ISAs, Mortgages and Home insurance.

ING Direct Australia

ING Direct Australia was established in 1999 and is headquartered in Sydney, offering banking online and via telephone. Its products in Australia include Transaction accounts, Savings accounts, Business accounts, Term deposits and Home loans.

The company's operations are regulated by the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission, Federal Government regulators. ING Direct is a division of ING Bank (Australia).

In October 2008, ING Direct suffered a $749 million outflow of deposit funds. There had been some confusion as to whether or not the Australian Government's guarantee over funds on deposit applied to deposits up to $1 million with ING DIRECT Australia. Once it was confirmed that the Guarantee did apply to ING DIRECT Australia, outflows that had been solely attributed to this situation slowed and deposits returned.[citation needed]

Commercial banking

ING Commercial Banking, London office

ING Commercial Banking provides banking and financial services to corporations and other institutions. The primary geographic focus of the commercial banking business is the Netherlands, Belgium, Poland and Romania, where it offers a full range of products, from cash management to corporate finance. Elsewhere, it takes a more selective approach to clients and products.

ING Commercial Banking was strengthened in 1995, when ING took over Barings Bank. This acquisition increased the brand recognition of ING around the world and strengthened its Commercial Banking presence in the emerging markets. Following the acquisition and up until 2004, ING's investment banking division was called ING Barings, at which point it severed its ties with the Barings name and combined with ING's other commercial banking operations.

14 However, the top floor of ING's London office is still home to the Baring Art Collection,[21] and the Baring Foundation,[22] a charitable foundation.

Commercial Banking is divided into a number of sub-divisions, including Structured Finance, Financial Markets, and Corporate Finance.

Corporate finance

ING's Corporate Finance department advises businesses on important corporate transactions, including mergers and acquisitions, initial public offerings, secondary offerings, share buy-backs and management buy-outs. The division is headed jointly by Maurits Duynstee (Head of Corporate Finance, Continental Western Europe) and Pierre Chabrelie (Head of Corporate Finance, UK and CEE). The bank has advised on a number of recent high-profile European transactions including satellite navigation manufacturer TomTom in a €359m rights issue, energy supplier Nuon in its €8.5bn sale to Vattenfall, and printer-maker Océ in its €1.3bn merger with Canon. ING was the leading advisor in the Dutch M&A league tables in 2009.

ING Corporate finance has a strong presence in Russia and Central and Eastern Europe. In 2009 ING advised Mobile TeleSystems OJSC (MTS), Russia's largest mobile operator, in its acquisition of a 51% stake in Comstar UTS for USD 1.27bn,[24] and Russia-focussed oil producer, Exillon Energy on its USD 100m IPO.

Insurance

ING's insurance business operates throughout America, Asia and Europe.

In 2009, ING announced plans to separate its insurance business from its main banking operations through two IPO's, one for Europe and Asia and another one the US. The EuroAsia IPO has been delayed while the US IPO is supposed to be completed by the end of 2012. Analysts estimate that the insurance arm is worth up to €16 billion.[26]

ING Australia

ING Australia was purchased by ANZ in 2009, and rebranded as "OnePath" in 2010.[27] ING Direct Australia emains part of the ING group.

In December 2011, it was reported that ING Australia had been defrauded of $45 Million by an employee.[28] She was convicted and sentenced to 15 years jail.

15 ING Investment Management

ING Investment Management is the principal asset manager of the Group and a leading global asset manager. Against the background of the Group realizing its global ambitions, ING Investment Management has also expanded across borders. Today, it is active in 33 countries, including some of the world’s fastest-growing economies, such as China, India, Brazil and many Eastern European nations. ING Investment Management operates along regional lines with centers of expertise in Europe, the Americas and Asia-Pacific.

ING Investment Management provides a comprehensive range of investment solutions and services to clients and partners. It manages assets for institutional clients, fund distributors and ING labels, with approximately €326 billion in AUM. Over 3,200 professionals manage client funds globally.[30

Sponsorships

ING New York City Marathon

ING sponsors a variety of sporting events and artistic exhibitions throughout the world.

Sporting

For several years, ING has been the title sponsor of various marathons including the New York City Marathon, the Miami Marathon, the Georgia Marathon, the Hartford Marathon, the Philadelphia Distance Run and San Francisco's Bay to Breakers.

ING is a major global sponsor of football/soccer, sponsoring the Royal Dutch Football Association and the Asian Football Confederation (AFC).

ING was the title sponsor of the Renault Formula One team from the 2007 season to the 2009 season. It was also the title sponsor of the Australian Grand Prix and Belgian Grand Prix, the Hungarian Grand Prix, and the Turkish Grand Prix. ING ended its sponsorship of Renault in part due to a reduction in advertising spending, and in part due to controversy surrounding the Renault Formula One team.

The arts

ING's sponsorships in the arts include the Dutch National Museum in Amsterdam (the Rijksmuseum), the New York Museum of Modern Art, and also the Royal Concertgebouw Orchestra. ING also owns and houses a number of proprietary art collections located in Belgium, Mexico, the Netherlands, Poland and the United Kingdom.[33]

16 7. ING in India

In India, ING is present in all three fields of banking, insurance and asset management in the form of ING Vysya Bank, ING Life Insurance and ING Investment Management respectively. The presence in all three fields signifies the importance that the group attaches to the Indian markets and the group's operations here, as well as its bullish future outlook on the country.

17 8. ING Investment Management – India

ING Investment Management (I) Pvt Ltd has been associated with innovation and responsive adaptability with sharp minds at work. ING Investment Management has sealed a position of strength and is considered as one of the top contenders to challenge the market leaders. ING Investment Management has enjoyed many firsts and has always maintained a pioneering outlook.

ING Investment Management India operates under two divisions

 A Single Manager division called ING Investment Management division. Under the Single manager business ING offers a range of equity, debt and alternative asset class funds. Each fund follows a stringent investment process backed by ING Investment management in house research.  A Multi Manager division called OptiMix. OptiMix is India’s first Multi Manager Investment solution, featuring open architecture, zero brand bias and active management. At OptiMix, the belief is to construct a Multi Manager fund is not by simply combining the funds with the best performance records. Instead, use core research and proprietary investment tools to blend funds which offer the potential for superior, consistent performance in the future.

18 9. Banking Industry in Netherlands

The banking industry plays a central role in every economy. The Dutch economy, too, would be unable to function without the many forms of bank services. Banks extend loans to businesses and private persons, making it possible for them to invest. Furthermore, they handle payments and securities transactions, manage savings, and advise and guide enterprises when they go public. In fact, there is a package of products and services tailored to the needs of every individual. The aggregate balance sheet total, which amounted to EUR 2,807 billion as at the end of September 2005, underlines the banks’ economic importance. The banking industry is also a major employer, with a total work force in the Netherlands of about 110,000 and approximately 160,000 with Dutch banks abroad. Please refer to our annual report for an overview of the balance sheet total and the number of employees employed in the banking industry.

Relation to the regulatory authorities

It is important that the public’s trust in the banks remain inviolate. For this and other reasons, the Dutch central bank (De Nederlandsche Bank, DNB) sees to it that the banks operate in a sound and prudent way. With its system of licenses, and monitoring compliance, DNB ensures that banks meet certain minimum requirements. The regulators also supervise the integrity of the financial system and the management. Another regulatory body is the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten, AFM), which is in charge of the supervision of conduct of all financial institutions. Supervision in the Netherlands is of high quality.

Relation with the public authorities

As well as with the regulatory authorities, the banking industry also has to deal with the Dutch public authorities. Formal and informal consultations about a range of issues are held with the House of Representatives (Tweede Kamer). Consultations with ministers and officials at the various ministries, (notably the Ministries of Finance, Economic Affairs, Justice, and Social Affairs and Employment) are also an important activity. More and more recommendations, directives and regulations issued by Brussels demand attention. European bodies, such as the European Commission, the European Parliament, and the European Council are therefore also important focal points

Relation to society

19 Corporate social responsibility or sustainable enterprise is a notion that has become an integral part of the banks business operations. Banks are aware of their position in society and focus their attention on a large number of issues that fall within NVB’s competence. These issues may be connected with environmental aspects, lending, payments, the banks’ contribution to the fight against terrorism and fraud and a range of other subjects. Growing demand for transparency and openness, too, is an important development where banks take the lead.

20 10. CONCLUSION

Financial and systemic oversight

The Netherlands has a long history as an open trading nation, with household-name institutions operating worldwide. With this history, the financial sector is dominated by systemically important institutions that operate in diverse markets. Such institutions bring considerable benefit to the country—however, the crisis has shown that they also bring sizeable risks. An IMF study has concluded that the Netherlands is the seventh most financially interconnected country in the world. Mitigating the risks in this position requires careful and comprehensive monitoring and supervision. This in turn requires strong supervisory institutions, with well-recognized powers, and the willingness and ability to use them.

Independence of supervisors is recognized to be an essential element for effective supervision, and the DNB and the AFM have histories of broad independence. Current law affords the Minister of Finance residual powers under certain qualified circumstances to take back supervisory functions and override regulations. This balance between the executive and the delegated agencies is explained in terms of the Netherlands’ practice, and the formal powers vested with the position of the minister have never been exercised. It is important that use of the ministerial override powers be exceedingly rare, and that they not be seen as a threat that could chill appropriate actions.

DNB is making intensive and well-focused efforts to redress earlier criticisms. It has issued two publications “DNB Supervisory Strategy 2010-2014” and “From Analysis to Action” that indicate a commendable sensitivity to the perceptions of earlier difficulties, and a change in culture that can lead to a more pro-active and decisive role in supervising the financial sector and enforcing prudential requirements. These publications are being widely circulated inside and outside DNB; it will be important that full buy-in for their objectives and methods is achieved both inside and outside the institution.

The allocation of the prudential function to DNB reflected the recognition of the benefits of having a strong and credible institution to carry out this role; clear delineation of its powers, and demonstrated use of these powers would be important to restore credibility. The strategy of higher intensity supervision will be important, including greater use of formal enforcement powers when merited, for which the latter confronts an increasingly litigious environment. To address this concern DNB and the AFM should be provided with legal protection for their official actions as institutions, except in cases of gross negligence or willful misconduct, in line with practice in many neighboring countries. It would be helpful to provide similar protection to State and resolution trustees in the case of resolution actions.

21 In the Netherlands a robust supervisory framework for the securities market has developed. As the primary supervisor of the securities market, the AFM uses a risk-based approach based on themes that become the focus of onsite-supervision, complemented with an institution-based program of both off-site and on-site supervision of high-impact firms.

Banks

The assessment of the Basel Core Principles for Effective Banking Supervision indicates that the supervision of Netherlands banks by DNB has achieved a high level of compliance. There are some areas for improvement. In particular, consolidated supervision could be strengthened. Also, DNB does not have full powers to impose resolution tools.

Insurance companies

The assessment of the Insurance Core Principles indicates also that supervision of Dutch insurance companies has a high level of observance. With the implementation of the 2006 Act for Financial Services, which is incorporated into the 2007 Financial Supervision Act, and related regulations, the authorities have addressed almost all the recommendations in this area arising from the 2004 FSAP. DNB has strengthened its risk-based supervision. It has also embarked on more intrusive supervision of insurers’ business models and culture. The remaining weaknesses relate more to inadequate legal authority of DNB and the AFM in supervising insurance groups and insurers’ product development process. The implementation of Solvency II requirements in 2013 will further enhance risk-based supervision.

22 A GLOBAL / COUNTRY STUDY AND REPORT ON “ ______ROYAL PHILLIPS______”

Submitted to Gujarat Technological University

IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ASMINISTRATION

UNDER THE GUIDANCE OF

Ms. Priyanka Nair Asst. Professor

Submitted by ARYA DEVAL (108000592094) BAROT YOGINI (108000592050) BHATT DHRUTI (108000592007) CHAKALIYA YAMINI (108000592093)

[Batch: 2010-12] MBA SEMESTER IV Oxford School Of Management MBA PROGRAMME Affiliated to Gujarat Technological University Ahmedabad May, 2012 PREFACE This project has been taken with a view to make an in depth analysis of latest & unique marketing strategies employed by PHILIPS.

With special reference to Electronics goods & thus uncover the reasons that have propelled the company to retain its position as leading company in E lectronic Industry despite of stiff competition from other competitors.

The present study creates awareness about the product quality & unique features put forth by PHILIPS.

It also provides knowledge to the readers about customer preferences & competitive analysis between various competitive firms

The present is an effort to formulate strategy to boost up the market share for Electronics goods of PHILIPS.

i ACKNOWLEDGEMENT

I have been able to prepare my report successfully and I acknowledge a special thanks to all those people without whose support it was impossible for me to make the project report.

I would hereby take this opportunity to show my gratitude towards all my mentors for what I have learnt during my training. A good response, feedback and co-operation given by whole staff helped me in gaining knowledge and solving my queries.

The successful completion of this project could not have been possible without the co- operation and support of my faculty guide and company guide who have given complete information for the project.

I feel immense pleasure to thank MR.JAPAN SHAH H.O.D OF OXFORD SCHOOL OF MANAGEMENT. For making available all facilities in fulfilling the requirements for the research work.

I forward my appreciation to respected coordinator of the OXFORD COLLEGE. Prof. priyanka nair I express my gratitude to , who supported and guided me throughout the project period.

ii TABLE OF CONTENT Sr. no. Particular Page no. 1. Introduction 1 2. Function & Business activities 10 3. Comparative position 16 4. National policy on electronic goods 18 5. Competitor of Philips 20 6. SWOT analysis 24 7. Import & Export and Business Opportunities 27 8. Trade Barriers 30 9. Conclusion 35 1 INTRODUCTION OF ELECTRONIC INDUSTRY Electronics industry, the business of creating, designing, producing, and selling devices such as radios, televisions, stereos, computers, semiconductors, transistors, and integrated circuits (see electronics). As sales of electronic products in the United States grew from some $200 million in 1927 to over $266 billion in 1990, the electronics industry transformed factories, offices, and homes, emerging as a key economic sector that rivaled the chemical, steel, and auto industries in size. Origin of electronic industry

The industry traces its origins to the invention of the two-element electron tube (1904) by John Ambrose Flemming, and the three-element tube (1906) by Lee De Forest. These inventions led to the development of commercial radio in the 1920s, which boosted radio sales to $300 million by the end of the decade. In 1947, the electronics industry made another important advance when John Bardeen, Walter Brattain, and William Shockley invented the transistor. Smaller, lighter, and more durable than the vacuum tubes that had been used in radios, transistors touched off a period of progressive miniaturization of electronic devices. Integrated circuits, which were developed in the 1950s, allowed the integration of several circuits into one circuit, and the introduction of analog devices in the 1960s vastly increased the amount of information that could be stored on a single silicon chip. Other important sectors that have made great advances since the 1970s include laser and optical electronics, digital electronics, and microwave electronics. Advances in the field of electronics have also played a key role in the development of space technology and satellite communications; inaugurated a revolution in the computer industry that led to the introduction of the personal computer; resulted in the introduction of computer-guided robots in factories; produced systems for storing and transmitting data electronically; greatly expanded the market for popular music and culture; and, in the process, transformed life at home, the office, and the factory. Many of these innovations, such as the transistor, had their origins in military research, which needed increasingly complex electronic devices for modern high-tech warfare. In the 1960s, the U.S. consumer electronics industry went into decline as manufacturers were unable to compete with the quality and pricing of foreign products, especially the electronic goods produced by Japanese companies such as Sony and Hitachi. By the 1980s, however, U.S. manufacturers became the world leaders in semiconductor development and assembly.

2 In the 1990s semiconductors were essential components of personal computers and most other electronic items (including cellular telephones, televisions, medical equipment, and “smart” appliances). While U.S. companies are still a major presence in the semiconductor industry (representing about 40% of world sales in 1998), the consumer items themselves are mostly made overseas. Worldwide electronic sales were nearly $700 billion in 1997.

3 THE NETHERLANDS ECONOMIC STRUCTURE The Netherlands economic structure runs on the principles of an open economy. The Netherlands is a prosperous economy that depends on foreign trade. Netherlands’ economic structure features a stable industry sector, low inflation and unemployment rate and an impressive current account surplus. According to the 2009 statistics, the current account balance is $33.72 billion.

 Netherlands Economic Structure: Primary Sector The service sector is the most dominant and biggest contributor to Netherlands’ economy. The service sector contributes as much as 73.7% to the GDP (2009 figures) and generates employment opportunities for 80% of the workforce (8.33 million). The service sector includes financial services, transportation, goods distribution and tourism. The computer related industry is also a well developed segment for the sector. The telecommunication industry holds a lot of potential as well. The latest trend in the service sector seems to be mergers to consolidate resources and optimize usages

 Netherlands Economic Structure: Secondary Sector Netherlands’ industrial sector is a well diversified segment with a variety of industries, such as petroleum refining, food processing, chemicals and electrical machinery. Other prominent industries are: · Agro-industries · Metal and engineering products · Construction · Microelectronics · Fishing The industry sector contributes 24.4% to the GDP and employs almost 18% of the workforce. The government is taking steps to encourage the growth of new industries in areas that are economically depressed. Specific measures have been taken to encourage growth in biotechnology, aerospace industry and microelectronics. Being a huge economy, FDI keeps coming in and stood at $661 billion in 2009.

 Netherlands Economic Structure: Tertiary Sector

4 The agriculture sector remains a well mechanised sector that employs almost 2% of the workforce and contributes to exports as well. The various goods that the sector produces are: · Grains · Potatoes · Sugar beets · Fruits · Vegetables · Livestock

However, as tourism and the demand for services decreased during the recession years, the unemployment rate grew from 4% to 5% in 2009. Investments remained low as well, at just 19.4% of the GDP. The government has, therefore, responded with more flexible norms and regulations. The stern financial policies have been abandoned and the government is accelerating the projects to gather some growth momentum.

5 LIFESTYLES One characteristic of Dutch society is that family members are relatively independent of one another, particularly in financial terms. The elaborate national system of social welfare makes this possible.

Dutch children generally leave their parental home between the ages of 18 and 24. They either move into a rented room by themselves, set up housekeeping with a friend, live together or marry. The Dutch tolerate a wide variety of lifestyles with the attitude that everyone should be able to live as they wish as long as they are not too much of a public nuisance.

6 HISTORY OF PHILIPS

The Philips Company was founded in 1891 by Gerard Philips and his father Frederik as a family business. Frederik Philips, being a banker in Zaltbommel, financed the purchase and setup of a modest, empty factory building in Eindhoven, where Philips started the production of carbon-filament lamps and other electro-technical products in 1892. This first factory has been adapted and is used as a Museum devoted to light sculpture In 1895, after the first difficult years and near bankruptcy, the Philipses brought in Anton, Gerard's younger brother by sixteen years. Though he had earned a degree in engineering, Anton started work as a sales representative; soon, however, he began to contribute many important business ideas. After Anton's arrival, the family business began to expand rapidly, resulting in the foundation in 1907 of the N.V. Philips’ Metaalgloeilampfabriek (the Philips Lightwire-bulb Factory Inc) in Eindhoven, followed in 1912 by the foundation of the N.V. Philips' Gloeilampenfabrieken. (the Philips Light-bulbs Factories Inc). After Gerard and Anton Philips changed their family business by founding the Philips Incorporation, they laid the base of the later electronics multinational. In the 1920s, the company started to manufacture other products, such as vacuum tubes. In 1939 they introduced their electric razor, the Philishave (marketed in the USA using the Norelco brand name). Philips was also instrumental in the revival of the Stirling engine. Philips Radio

On 11 March 1927 Philips went on the air with shortwave radio station PCJJ (later PCJ) which was joined in 1929 by sister station PHI. PHI broadcast in Dutch to the Dutch East Indies (now Indonesia) while PCJJ broadcast in English, Spanish and German to the rest of the world. Philips Radio did not resume after Liberation. Instead' the two shortwave stations were nationalized in 1946 and renamed as Radio Netherlands Worldwide, the Dutch International Service. Some PCJ programs, such as Happy Station, continued on the new station. World War II

On 9 May 1940, the Philips directors learned that the German invasion of the Netherlands was to take place the following day. Having prepared for this, Anton Philips and his son in law Frans Otten, as well as other Philips family members, fled to the United States, taking a large amount of the company capital with them. Operating from the US as the North

7 American Philips Company, they managed to run the company throughout the war. At the same time, the company was moved (on paper) to the Netherlands Antilles to keep it out of American hands. 1945 to 2000

Frits Philips, the son of Anton, was the only Philips family member to stay in the Netherlands. He saved the lives of 382 Jews by convincing the Nazis that they were indispensable for the production process at Philips. In 1943 he was held at the internment camp for political prisoners at Vught for several months because a strike at his factory reduced production. For his actions in saving the hundreds of Jews, he was recognized by Yad Vashem in 1995 as a "Righteous Among the Nations". In 1972 Philips launched the world's first home video cassette recorder, in England, the N1500. Its relatively bulky video cassettes could record 30 minutes or 45 minutes. Later one- hour tapes were also offered. As competition came from Sony's Betamax and the VHS group of manufacturers, Philips introduced the N1700 system which allowed double-length recording. For the first time, a 2-hour movie could fit onto one video cassette. In 1977, the company unveiled a special promotional film for this system in the UK, featuring comedian Denis Norden. The concept was quickly copied by the Japanese makers, whose tapes were significantly cheaper. Philips made one last attempt at a new standard for video recorders with the Video 2000 system, with tapes that could be used on both sides and had 8 hours of total recording time. As Philips only sold its systems on the PAL standard and in Europe, and the Japanese makers sold globally, the scale advantages of the Japanese proved insurmountable and Philips withdrew the V2000 system and joined the VHS Coalition. Philips had developed a laser disk early on for selling movies, but delayed its commercial launch for fear of cannibalizing its video recorder sales. Later Philips joined with MCA to launch the first commercial laser disk standard and players. In 1982, Philips teamed with Sony to launch the Compact Disc; this format evolved into the DVD and later Blu-Ray, which Philips launched with Sony in 1997 and 2006 respectively. 2000 to present

The current Philips headquarters in Amsterdam, Netherlands In December 2005 Philips announced its intention to sell or demerge its semiconductor division. On 1 September 2006, it was announced in Berlin that the name of the new company formed by the division would be NXP Semiconductors. On 2 August 2006, Philips

8 completed an agreement to sell a controlling 80.1% stake in NXP Semiconductors to a consortium of private equity investors consisting of Kohlberg Kravis Roberts & Co. (KKR), Silver Lake Partners and AlpInvest Partners. On 21 August 2006, Bain Capital and Apax Partners announced that they had signed definitive commitments to join the acquiring consortium, a process which was completed on 1 October 2006. The Philips physics laboratory has scaled down. As of 2010, the company does not try to be innovative in consumer electronics through fundamental research, but continues to improve its many consumer lifestyle products. Due to net profit slumped 85 percent in Q3 2011, Philips has announced to cut 4,500 jobs to match part of an Euro800 million ($1.1 billion) cost-cutting scheme to boost profits and meet its financial target.

9 10 FUNCTIONS OF PHILIPS  Marketing Throughout 2009, Philips continued to deliver on its brand promise of “sense and simplicity”. Driving thought leadership in Health and Well-being, combined with a continued focus on Net Promoter Score (NPS) to improve customer experiences across all touchpoints, was central to Philips’ marketing strategy in 2009. As a result, the company moved up to 42nd place on the Interbrand ranking of the 100 best global brands. This progression is continued evidence that the promise of “sense and simplicity” resonates with stakeholders and customers. Since the launch of “sense and simplicity” five years ago, Philips’ brand value has increased 85%. Philips’ total 2009 marketing expenses declined nominally to EUR 804 million, but as percentage of sales remained broadly in line with 2008 levels. In 2009, Philips’ marketing strategy showed an increased focus on organizing around customers and markets. To that end, global investment was tailored more substantially to strategic markets. In support of its sustainability campaign, the company launched ASimpleSwitch.com to business stakeholders. This online platform promotes smart energy efficiency and consumption in the business and consumer space. The company also leveraged social media capabilities to drive marketing messaging and brand awareness via the launch of Philips.Live.com, an internal and external video platform that enables consumers, customers and employees to share short video clips on their experiences with Philips products and services. In 2010, Philips will continue to leverage online and social media to drive thought leadership in Health and Well-being. Greater emphasis will be placed on increasing our online presence in emerging and growth markets. Driving sustainable customer engagement in concert with our brand promise is essential to our company goals and aspirations. We have used the Net Promoter Score (NPS) since 2006 to drive our company’s efforts to improve customer experiences at all touchpoints. The implementation of this measure has confirmed that outstanding customer and consumer loyalty are critical to achieving growth. We continue to leverage NPS insights to drive customer centricity and direct our market strategy.Our NPS has continued to grow each year. In 2009, we achieved increased NPS leadership across our businesses and as a result 60% of our businesses currently have industry leadership positions. We noted strong performance in the emerging markets China and India. In more established markets such as the US and

11 Germany improvements were also achieved. In 2010, we will continue to expand our coverage of NPS to include additional strategic markets and cross-sector business domains.

 RESEARCH & DEVELOPMENT Our Research & Development teams create innovative, meaningful products and solutions for customers – a critical driver of Philips’ competitiveness in its markets. By maintaining our substantial R&D investments in 2009, Philips has continued to expand its vast knowledge and intellectual property base. Early involvement of customers in new technologies, application and business concepts ensures deep insight into their needs – the foundation for our innovations. To better capitalize on opportunities in fast-growing emerging markets, Philips is in the process of reallocating EUR 250 million to innovation projects in high-growth market segments. In 2009, approximately one third of this reallocation was completed. Underlining our focus on market-driven innovation, we have created a Board function managing Markets and Innovation, incorporating the role of Chief Technology Officer and the responsibility for managing Corporate Technologies. Research and development expenses per sector in millions of Euros 2007 2008 2009

Healthcare 594 672 679 Consumer Lifestyle 504 513 395 Lighting 282 345 351

In 2009, Philips’ investment in R&D activities amounted to EUR 1,631 million (7.0% of sales), compared with EUR 1,777 million (6.7% of sales) in 2008.

Since the Incubator activities are now maturing and increasingly aligned with the growth plans of our individual sectors, the early-stage incubation costs, which were originally covered at Group Management & Services, are now allocated to the Research and Development costs of the respective sectors. R&D expenses for prior years have been reclassified to reflect the allocation of the Incubator costs to the business sectors. Healthcare R&D expenses increased slightly in 2009, reflecting our continued investments in emerging markets and home healthcare. Lighting’s expenses were broadly in line with 2008, although

12 with a reduction in traditional lighting and an increase in solid-state lighting applications. At Consumer Lifestyle, we maintained R&D investment as a percentage of sales at the level of 2008, while reducing spend in mature areas like TV.

The global recession affected demand for new product, and our new product sales – products introduced within the last year (for B2C products) or three years (for B2B products) – dropped from 58% of total sales in 2008 to 48% in 2009. Philips aims to maintain this ratio at around 50%, while at the same time focusing on the profitability of new products and reallocating innovation spend more towards new business creation.

 SUPPLY MANAGEMENT The Supply Management function has been designed to create value for Philips by leveraging the scale of the company, thereby creating a single point of management and accountability for our supply base and supply chain activities. It covers non-product-related purchasing through the dedicated shared service Philips General Purchasing, and bill-of-material purchasing leveraged for Philips via commodity teams working across the sectors.

 BUSINESS SEGMENTS  Healthcare Philips Healthcare is one of the world’s top three medical device companies. We aim to improve the quality of people’s lives through developments including imaging systems, customer services, information and monitoring systems. We enjoy a number one position in several of these, including X-ray, cardiovascular ultrasound, patient monitoring and automatic external defibrillators. Our HeartStart Home Defibrillator brings life-saving technology to consumers in their own homes, where the majority of sudden cardiac arrests occur. It’s just one of the many ways we deliver ‘advanced’ technology that is ‘designed around you’ and ‘easy to experience’. Product · 256-slice Brilliance ICT scanner · the Integrated cath lab · Avalon FM 20 & FM 30 fetal monitors · the Ambient Experience MR and CT systems · Philips Lifeline's personal emergency alert service.

13  Consumer Lifestyle Philips Consumer Lifestyle offers rich, new consumer experiences that meet consumers’ desire for wellness and pleasure, starting from our consumer insights and guided by our brand promise of “Sense and Simplicity”. We are a highly consumer-driven organization that focuses on the individual's interests in terms of their Space, their Mind, their Body, and their Appearance.

The aim of Philips Consumer Lifestyle is to deliver lifestyle solutions for personal well- being. The sector’s headquarters is based in Amsterdam and has a highly international workforce of approximately 25,000 employees spread over 60 countries, with sales in more than 100 countries. Philips Consumer Lifestyle’s business activities cover TV, Audio and Video, Personal Care, Small Domestic Appliances, Mother & Child Care, Electronic Accessories and Professional & Business Solutions. Products · Whole-Fruit Juicer · Swarovski Encrusted Headphones, · Aurea Ambilight Television · Wake-up Light, Arcitec Shaver · The One-Touch Espresso Machine.

Lighting sectors

For Philips, improving lives with light goes back to our founding fathers in 1891. As the world’s leader in Lighting, Philips is driving the switch to energy-efficient solutions. With worldwide electrical lighting using 19 per cent of all electricity, the use of energy-efficient lighting will significantly reduce energy consumption around the world and thereby cut harmful CO2 emissions. Philips provides advanced energy-efficient solutions for all segments: road lighting, office & industrial, hospitality and home.

Philips is also a leader in shaping the future with exciting new lighting applications and technologies such as LED technology, which in addition to energy efficiency, provides attractive benefits and endless new ‘never-before-possible’ lighting solutions. Through a huge array of products, and variety in design, intensity, color and effects, we help make life

14 easier and more efficient. From lighting for interiors and offices to Olympic Stadiums and the Eiffel Tower, we beautify people’s homes and public spaces and enhance safety and a sense of well-being. Light can provide heat, purify water, treat disease, increase road safety — even play a role in semiconductor manufacturing — and we’re active in them all.

Product · Xenon car lighting · Cosmo Polis street lighting · Living Colors ambience lighting.

15 16 PHILIPS IN INDIA POISED FOR BIG GROWTH Philips reconfirms commitment to redirect resources to help fuel growth in emerging markets and expand its commercial and industrial footprint BANGALORE, INDIA: Royal Philips Electronics, a global leader in Healthcare, Consumer Lifestyle and Lighting has outlined its focus on India as an emerging market. Keeping its commitment to delivering affordable healthcare solutions in emerging markets, Philips announced the acquisition of Medtronic’s, a leading manufacturer of General X-Ray systems targeting the economy segment in India.

Philips plans to tap Gujarat market with freebies BS Reporter / Mumbai/ Ahmedabad October 02, 2006 Philips Electronics is planning to tap the Gujarat market with a new freebie strategy, which would involve offering a gift along with each of its products right from the low-end to the luxury segment. The company is offering freebies that are worth almost 25-30 per cent of the product's value, a move which has not been adopted so far for its Gujarat markets. “We have very strong competitors in Sony and LG and others depending on each segment and with the freebie strategy formulated during the festive season, we are hoping to capitalise on the early mover advantage,” Mrugesh Gaglani, brand manager (mini systems), consumer electronics, Phillips, told Business Standard. The company is planning a major nationwide promotional strategy in the media, which will get underway in the next couple of days. He said they the were planning to concentrate more on assured gift and exchange offer schemes to boost the visibility instead of the scratch card system, which is usually adopted by consumer goods companies. Philips has major plans for Gujarat and is soon planning to launch newer variants of colour televisions and music systems. “Philips has a current market share of around 22 per cent in the DVD segment and we project it to increase to 25 per cent. Similarly, we occupy a market share of 40 per cent in home theatres and expect it to go up to 45 per cent this season. We also envisage a steady growth in colour televisions with the launch of the newer models,” said Jitendra Jodwani, branch head, Gujarat, Phillips.

17 18 Electronics Industry reported at USD 1.75 Trillion is the largest and fastest growing manufacturing industry in the world. It is expected to reach USD 2.4 Trillion by 2020. The demand in the Indian market was USD 45 Billion in 2008-09 and is expected to reach USD 400 Billion by 2020. Domestic demand is expected to be driven by growth in income levels leading to higher off-take of electronics products, automation demands of corporate sector and the government’s focus on e-governance. The domestic production in 2008-09 was about USD 20 Billion. However, the actual value-addition in the domestically produced electronic product is very low, ranging between 5 to 10 percent in most cases. At the current rate of growth, the domestic production can cater to a demand of USD 100 Billion in 2020 as against a demand of USD 400 Billion and the rest would have to be met by imports. This aggregates to a demand supply gap of nearly USD 300 Billion by 2020. Unless the situation is corrected, it is likely that by 2020, the electronics import may far exceed oil imports. This fact goes unnoticed because electronics, as a “meta resource” forms a significant part of all machines and equipment imported, which are classified in their final sect oral forms, for example, automobiles, aviation, health equipment, media and broadcasting, defense armaments, etc. It is also pertinent to note that Indian electronics hardware production constitutes only around 1.31% of the global production. On the other hand, the share of global electronic equipment production of the largest contributing nation has increased from 17% in 2004 to 33% in 2009. Conversely, the country’s imports are expected to rise from 50% to 75% even as demand is rocketing.

India is a recognized global player in software and software services sector. It lags behind in electronics hardware manufacturing capabilities, though it is increasingly becoming a destination for chip design and embedded software. The vision is to transform India into a global hub for electronics system design and manufacturing (ESDM) so as to meet the growing domestic and global demand. There are many challenges to advance the same – infrastructure gap, tax structure, supply chain and logistics, inflexible labor laws, limited R&D focus, inadequate funding and limited value addition. Recognizing the importance and potential of the Electronics Sector, several economies in the Asia-Pacific region have repositioned themselves through infrastructural investments and proactive policies to emerge as a global power-house in this field.

19 20 Competition Name Last Price Market Cap. Sales Net Profit Total Assets (Rs. cr.) Turnover

Videocon Indust 173.25 5,249.85 14,675.93 744.69 21,207.65

PG Electroplast 203.65 334.28 423.97 17.90 113.85

Mirc Electronic 15.00 212.63 1,912.57 27.29 421.95

Jindal Photo 156.00 160.03 399.88 17.12 235.27

BPL 18.40 89.55 91.84 77.73 434.38

MVL Industries 9.10 23.96 473.05 16.97 281.06

Salora Inter 19.20 16.91 512.38 -9.13 169.08

21 Comparison with Competitors

Balance Sheet ------in Rs. Cr. ------

Videocon PG Mirc Jindal Philips Indust Electroplast Electronic Photo

Dec '09 Dec '10 Mar '11 Mar '11 Mar '11

Sources Of Funds

Total Share Capital 57.50 347.96 10.67 14.19 10.26

Equity Share Capital 57.50 301.95 10.67 14.19 10.26

Share Application Money 0.00 0.00 0.00 0.00 0.00

Preference Share Capital 0.00 46.01 0.00 0.00 0.00

Reserves 747.60 9,085.92 34.74 252.32 225.00

Revaluation Reserves 0.00 0.00 0.00 0.00 0.00

Networth 805.10 9,433.88 45.41 266.51 235.26

Secured Loans 10.50 5,937.61 66.89 110.45 0.00

Unsecured Loans 4.50 5,836.16 1.57 45.00 0.00

Total Debt 15.00 11,773.77 68.46 155.45 0.00

Total Liabilities 820.10 21,207.65 113.87 421.96 235.26

Videocon PG Mirc Jindal Philips Indust Electroplast Electronic Photo

Dec '09 Dec '10 Mar '11 Mar '11 Mar '11

Application Of Funds

Gross Block 778.30 9,536.60 68.82 416.41 56.67

Less: Accum. Depreciation 449.60 4,804.07 7.22 209.87 29.97

22 Net Block 328.70 4,732.53 61.60 206.54 26.70

Capital Work in Progress 17.60 1,270.58 18.53 0.78 0.53

Investments 0.50 4,267.96 0.65 26.54 160.09

Inventories 360.80 2,040.14 16.66 346.46 59.87

Sundry Debtors 316.70 2,647.33 36.95 163.51 5.07

Cash and Bank Balance 425.10 401.24 0.83 42.85 9.90

Total Current Assets 1,102.60 5,088.71 54.44 552.82 74.84

Loans and Advances 279.10 6,639.36 21.75 105.81 46.93

Fixed Deposits 0.00 915.20 5.32 4.27 0.41

Total CA, Loans & Advances 1,381.70 12,643.27 81.51 662.90 122.18

Deffered Credit 0.00 0.00 0.00 0.00 0.00

Current Liabilities 774.30 1,588.71 44.97 455.36 64.37

Provisions 134.10 117.98 5.14 19.45 9.86

Total CL & Provisions 908.40 1,706.69 50.11 474.81 74.23

Net Current Assets 473.30 10,936.58 31.40 188.09 47.95

Miscellaneous Expenses 0.00 0.00 1.67 0.00 0.00

Total Assets 820.10 21,207.65 113.85 421.95 235.27

Contingent Liabilities 104.00 191.47 6.39 81.77 29.92

Book Value (Rs) 126.99 310.89 42.56 18.80 229.33

Source : Dion Global Solutions Limited

23 24 SWOT ANALYSIS OF PHILIPS Every company faces few challenges and weaknesses in its existence, therefore, to know company’s strengths and opportunities is desirable to overcome any difficulties that may arise and successfully predict any trends. SWOT Analysis is a marketing tool that gathers and analyse these information about the company. With help of SWOT, which stands for Strengths Weaknesses, Opportunities and Threats, Philips would know how to deliver their products and right services to its customers effectively.(Kotler, P. 2005) Internal Strengths Philips has a recognizable and very strong brand image that was established thorough the years. The core values and the whole icon of Philips are based on the quality, value for money, innovation, and superiority of the service and on the trust. The product range is wide, modern and of good quality.Philips products and solutions are known to be advanced, easy to use, and designed to meet the needs of all users. Company also has strong intellectual property position as it has a lot of widely used technologies patented as their own innovation. Philips’s another strength is operations excellence and flexibility of the firm, which helps it to deal with changes. Well built customer and supplier relationships also help the company. Philips is the worlds leading lighting supplier. Strategic alliances are an important part of business at Philips. They enable us to bring new products to the market that we would not have been able to develop on our own. Philips combines with a number of leading global companies to build advanced products and services that touch the lives of people everyday. Internal Weaknesses Philips Inc. operates in fields where competitiveness is very concentrated. However it has strong customer base it should not underestimate the emerging customers; it should keep up with new trends and updating the existing products, actively listen new proposals from customers and staff and continue to promote its brand image via effective advertisements. Another weakness is that Philips employs a huge number of people which work in a variety of different countries. Therefore the company experiences some problems in sharing information between employees and controlling operations of different businesses. New, efficient and less complicated ways of transmitting information between the stores, manufacturing premises, head office and various departments should take place in order to communicate successfully and deliver the most effective customer service. External Opportunities

25 Philips continuously explores new ways to improve products and to offer innovative products to its consumers. It has created a program through which higher and higher quality levels in all products and services will be reached. Technological products of Philips can be more design oriented.Creating jolly, modern and convenient stores with place to rest and have a coffer is another project, which Philips can undertake. Redevelopment will create good atmosphere in the stores, the changes would encourage customer to stay longer in the stores.

External Threats More retailers have understood where the market trends are going; quality, value is the key in today retail sector. Many companies started to produce the same quality products on a cheaper price. Another challenge that not only Philips faces is fast changing environment, where new products are introduced within small space of time. Therefore, keeping track with new trends and products is essential for the business. Spending habits and way how people shop is changing rapidly. People shop more on line, looking for promotions or wait until the sale period. Therefore, improve on-line facilities; friendlier web page would boost the sale and maintaining small promotions in the stores would invite higher number of visitors into the stores.

26 27 NETHERLANDS EXPORTS AND IMPORTS

The Netherlands trade is the main support system for the economy. Netherlands’ location also means that the nation is closest to the European regions that have the maximum population density. In fact, almost 160 million people stay within a 300 mile radius of the Netherlands, giving the country many regions to trade with. Almost 80% of Netherlands’ exports are to European nations and nearly 70% of its imports come from European nations as well. The Netherlands trades with a positive trade balance. As the nation enjoys a massive contribution through trade, it is an ardent supporter of open trade, along with the US.

 Netherlands Trade: Exports Netherlands’ export volumes amounted to $397.6 billion in 2009, dropping from $531.7 billion in 2008. The Netherlands ranked seventh in the world in terms of the export volumes. Being a land with abundant fertile land and excess food production, the Netherlands exports food items to most of its trading partners. Its other export commodities are:

• Machinery and equipment • Chemicals • Fuel

The Netherlands’ main export partners are: • Germany • Belgium • France • The UK • Italy

 Netherlands Trade: Imports According to the 2009 statistics, the Netherland imported a total volume of $358.9 billion, dropping substantially from $474.8 billion in 2008. The Netherlands ranked eighth in the world in terms of import volumes. With huge natural resources, the Netherlands requires machines to process them and therefore machinery dominates its imports. Other import commodities include:

28 • Transport equipment • Chemicals • Fuels • Foodstuffs • Clothing The Netherlands’ main import partners are: • Germany • China • Belgium • The US • The UK • Russia • France

29 TRADE BARRIERS  De-industrialization An increasing trade deficit may be a symptom of long-term de-industrialisation. The UK started to lose its manufacturing base in the 1970s, and this process has continued over the last 30 years. High export prices High export prices will occur if a country's inflation is higher than its competitors, or if its currency is over-valued which will reduce its price competitiveness. Non-price competitiveness Non-price factors can discourage exports, such as poorly designed products, poor marketing or a worsening reputation for reliability. Low levels of investment in human capital This involves a lack of investment in education and training, which reduces skill levels relative to competitor countries and forces countries to produce low value exports.  Poor productivity An economy might not be producing enough from its scarce factors of production. Labour productivity, which is defined as output per worker, plays an important role in a country’s competitiveness and trade performance, and the UK has suffered from poor productivity. The productivity gap is the gap between the UK’s relatively poor productivity performance and that of the UK’s leading competitors.  Low levels of investment in real capital This could be caused by excessive long-term interest rates, or low levels of research and development.  Low levels of investment in human capital This involves a lack of investment in education and training, which reduce skill levels relative to competitor countries and force countries to produce low value exports.  The rise of alternative global suppliers While the UK has slowly industrialised, emerging economies like China and India have increased their share of world trade, with their firms benefitting from access to new technology and from economies of scale. This has reduced the likelihood of smaller UK manufacturers selling abroad, while at the same time increased the likelihood of UK households and firms importing from these economies.

30 Business opportunities Healthcare, lighting business becoming more profitable than consumer electronics: Philips Tags: · TPV Technology · Royal Philips Electronics · lighting business · Healthcare equipment · consumer electronics Royal Philips Electronics, once a household name in India, has shed its image of a hardcore consumer electronics brand to become a healthcare and well-being brand. The possibilities to innovate, add value and draw good return are better in healthcare equipment and lighting business than consumer electronics, Philips Chief Executive Frans van Houten says. Houten, who took over as Philips CEO in April, expects the healthcare segment to dominate the Dutch firm's India business with 40% share in revenues in the future, up from 25% in 2010. The company will focus on innovation and affordability to push its healthcare equipment and lighting business in the country, he told ET's Pramugdha Mamgain and Chaitali Chakravarty in an interview in Delhi. Excerpts: Doing business in The Netherlands - Legal structure of the business When it is decided to start up activities in The Netherlands one should consider an appropriate legal structure for the business. Dutch law provides a variety of legal forms that may be used. Which is the best for your particular venture will depend on the specific demands of your business. Dutch company law does in essence not make a difference between Dutch nationals and foreigners. Companies created under foreign law are in general (certain government linked lines of business excepted) free to operate in The Netherlands, can be party to a contract, can participate in partnerships, can conclude a joint venture, or establish a legal entity, etc. For a brief description of the most frequently used legal forms in The Netherlands and there legal characteristics we refer to the schedule on the page Doing business in The Netherlands - Frequent used forms of business in The Netherlands. For some guidance with your decision to choose for either a corporation or a branch we refer to the page Corporation or branch. The Dutch B.V. (private limited liability company) is the most frequently used legal entity by foreign investors (for example to carry out a business, for direct investments, as holding company, IP company, finance company, etc.). Alternatively,

31 one may decide to establish a N.V. (a public limited liability company), which is the obligatory legal form for stock listed companies, but which can also be used for non-listed companies. For more information about the incorporation procedure for a BV we refer to the page How to incorporate a BV. Over last couple of years the legal form of Cooperative has become a very popular legal form for holding companies, as profit distributions by a Co- operative are in essence not subject to Dutch dividend withholding tax. For more information about the incorporation procedure of a Co-operative we refer to the page How to incorporate a Co-operative. Also, the so-called European company, better known as "Societas Europaea" or "SE" (a new Pan-European company form which can be incorporated within the EU) and the European Co-operative Company (SCE) were introduced. As the features of the SCE are comparable to the SE, in Dutch law the SCE is made equal to the SE. However, certain regulations that specifically apply to Dutch co-operations can also apply to SCE's. If it is not desired to set up a legal entity, you may decide to set up a Dutch branch of your foreign company. For more information about the procedure to establish a branch we refer to the page How to establish a branch/representative office. One can consider the form of a partnership when a joint venture is to be established with a Dutch party or a foreign party with The Netherlands as its base. In case you plan to acquire a Dutch company, you may either choose to participate directly or to set up one or more Dutch (intermediate) holding company(ies). For more information about the Dutch holding company we refer to the page The Dutch holding company. The Netherlands is a constitutional monarchy and has a parliamentary democracy. The Constitution (1814) is the most important document of state in the Netherlands. It contains the fundamental rules for the political and legal structure of the Netherlands and establishes the fundamental rights of its citizens. It is the highest national law of the state; other laws are required to comply with its provisions. Political elections are held every four years. These elections are to the Lower House of Parliament, also called the Senate (Eeerste Kamer), a directly elected assembly of 150 people. The Upper House, also called the House of Representatives (Tweede Kamer), which has 75 members, is elected by the executive bodies of the provincial councils. Dozens of parties both large and small usually contest the elections. After the elections, a government is formed from representatives of those parties that can and wish to jointly form a majority in parliament. In addition, local elections are held once every four years. The citizens of each local authority elect a new local council. These elections are often a barometer for the national elections to be held (one year later). As regards the courts, the Netherlands does not have a jury system. The district courts deal with the majority of civil cases. The courts of law deal with the more important

32 (criminal) cases, while appeals against a judgment of a district court are also heard by the courts of law. Further appeal against a judgment of the courts of law lies with one of the five courts of appeal in the Netherlands.

THE TAX STRUCTURE OF NETHERLAND "The Netherlands’ favorable tax structure and relative lack of bureaucratic red tape is critical.” Fritz Meijaard, CFO for EMEA and General Manager for the headquarters office, NetApp Profitability is your company's first priority. You'll find the Netherlands' corporate tax structure advantageous to achieving your goals. For centuries, the Netherlands has been a nation of traders. To ensure that this longstanding tradition endures, the Dutch government has created a competitive tax regime that stimulates entrepreneurship and foreign investment in the Netherlands. The Dutch tax system has a number of features that may be very beneficial in international tax planning. o Relatively low statutory corporate income tax rate of 25% (20% for first 200,000 Euro) o Possibility of obtaining advance tax rulings from the Dutch tax authorities giving certainty on future tax position o Innovation box resulting in an effective corporate tax rate of 5% for qualifying profits o R&D allowance for qualifying R&D wage costs (WBSO)

33 o Tax deduction facility for R&D operating costs and investments in R&D assets (RDA) o Favorable participation exemption regime o Fiscal unity regime providing for a tax consolidation of companies within a group and therefore to freely offsetting profits and losses among group members o Transfer pricing practice in accordance with OECD Transfer Pricing Guidelines and the possibility to obtain an Advance Pricing Agreement (APA) o The possibility to carry forward losses for nine years and to carry them backward for one year

o Wide tax treaty network to avoid double taxation and reducing withholding taxes on dividends, interests and royalties (for interest and royalties often to 0%) o No statutory withholding tax on outgoing interest and royalty payments o Favorable tax treatment for foreign employees (30% tax ruling) o VAT deferment upon import: no upfront payment of VAT o Dutch Tax Authorities: access to the tax inspector o Dutch Customs Authorities: practical and pro-active approach

OBJECTIVES OF THE PROJECT

· To learn how to prepare a project report of a company. · To know what can be the content of a company project report. · To analyze the comparative study of a particular company to know whether the company is a booming company or not. · To know the future prospect of the company. · It may be helpful for our future profession.

34 CONCLUSION

Philips is India's largest electronic company with an annual turnover of Rs. 805.15 crores.Philips has many different products like health care, lighting etc but its main business in lighting industry. Philips has so many barriers but have many business opportunities in India. In India present situation for Philips company increase market 25-30%.“Philips has a current market share of around 22 per cent in the DVD segment and we project it to increase to 25 per cent. Similarly, we occupy a market share of 40 per cent in home theatres and expect it to go up to 45 per cent this season. We also envisage a steady growth in colour televisions with the launch of the newer models,” said Jitendra Jodwani, branch head, Gujarat, Phillips.

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