KADI SARVA VISHWAVIDHYALA

S.K.PATEL INSTITUTE OF MANAGEMENT & COMPUTER STUDIES

SUBJECT:- ECONOMICS FOR MANAGERS

Topic:- Applications of economic concepts to the Godrej/electronics

Prepared By:-Name DIV Roll NoBhuva Sunil L. A 11Jivani Dhaval V. A 36Katariya Mehul N. A 40Kukadiya Gunjan V. A 47Mandavia Dhaval G. A 50

Submitted On:- Submitted To:-21st Nov.2013 Prof. Sonu Gupta

Type : Public Industry : Conglomerate Founded : 1897 Founder : Ardeshir Godrej Piroisha Godrej Headquarters : Mumbai,Maharastra,India Area served : Worldwide Key people : Adi Godrej (Chairman) Nadir Godrej Products : Real estate,FMCG,Industrial engineering, Appliances,Furniture,Security,Agricare Revenue : RS.21600 crore(US$3.3billion) (2013) Employees : 26000 (2013) Website : www.godrej.com

Vision

“Be the most trusted solution provider in electrical and

electrical technologies”

Mission

“Energizing industry through advance technology”

Structures of Godrej Company:

ABOUT COMPANY

The Godrej Group is an Indian conglomerate headquartered in Mumabai,

Maharashtr,india, managed and largely owned by the Godrej family. It was

founded by Ardeshir Godrej Pirojsha Godrej in 1897, and operates in

sectors as diverse as real estate, consumer products, industrial engineering,

appliances, furniture, security and agricultural products.Subsidiaries and

affiliated companies include Godrej Industries and its subsidiaries Godrej

Consumer Products , Godrej Agrovet , and Godrej Properties , as well as the

private holding company

TIME LINE

1897 - Godrej is established in 1897 1902 - Godrej makes its first Indian Safe 1918 - Godrej Soaps Limited incorporated 1961- Godrej Started Manufacturing Forklift Trucks in India 1971- Godrej Agrovet Limited began as an Animal Feeds division of Godrej Soaps 1974 - Veg oils division in Wadala, Mumbai acquired 1990 - Godrej Properties Limited, another subsidiary, established 1991 - Foods business started 1994 - Transelektra Domestic Products acquired 1995 - Transelektra forged a strategic alliance with Sara Lee USA 1999 - Transelektra renamed Godrej Sara Lee Limited and incorporated Godrej Infotech Ltd. 2001 - Godrej Consumer Products was formed as a result of the demerger of Godrej Soaps Limited. Godrej Soaps renamed

Godrej Industries Limited 2002 - Godrej Tea Limited set up 2003 - Entered the BPO solutions and services space with Godrej Global Solutions Limited 2004 - Godrej HiCare Limited set up to provide a Safe Healthy Environment to customers by providing professional pest

management services 2006 - Foods business was merged with Godrej Tea and Godrej Tea renamed Godrej Beverages & Foods Limited 2007 - Godrej Beverages & Foods Limited formed a JV with The Hershey Company of North America and the company

was renamed Godrej Hershey Foods & Beverages Limited 2008 - Godrej relaunched itself with new colourful logo and a fresh identity music 2010 - Godrej launched GoJiyo a free, browser based 3D virtual world 2011 - Godrej & Boyce shuts down its typewritermanufacturing plant, the last in the world.

OPERATIONS OF GODREJ

Chemical & Commodities

ChemicalsVeg Oils

FMCGGodrej Consumer Products

Keyline Brands UKRapidol South AfricaGodrej Global Mideast FZEGodrej SCA Hygiene Limited

Godrej Hershey Foods & Beverages LimitedNutrine

Godrej Sara Lee  

AGRI Godrej Agrovet

Animal Feeds Goldmohur Foods and Feeds Golden Feed Products Higashimaru Feed Products Oil Palm Agri Inputs Godrej Aadhaar Nature's Basket Integrated Poultry Business Plant Biotech

Services Godrej HiCare (Pest Management Services) Godrej Global Solutions (ITES) Godrej Properties

BOARD MEMBERS

Adi Godrej is the Chairman of the Godrej Group and several entities that are part of one of India’s leading conglomerates. These include Indian companies like Godrej Industries, Godrej Consumer Products, Godrej Properties as well as international companies such as Keyline Brands U.K and Rapidol South Africa. He is also the Chairman of The Board of

trustees of Dadabhai Navroji’s Memorial Fund.

As a Director of numerous firms, including Godrej & Boyce, Godrej Agrovet, Godrej International and Godrej Global MidEast FZE he is responsible for shaping the long term strategy for these organizations and driving a focus on value creation. 

Over the last five decades Adi has played an important role in the development of a variety of industries by leading key organizations of trade and commerce as the former Chairman and President of the Indian Soap & Toiletries Makers’ Association, the Central Organisation for Oil Industry and Trade, the Solvent Extractors’ Association of India, the Compound Livestock Feeds Manufacturers’ Association, the Indo-American Society and as member of the Governing Board of the National Council of the Confederation of Indian Industry.

Nadir Godrej Mohan Pusalkar Naushad Forbes Jamshyd Godrej Kavas Petigara Vijay Crishna Kersi Dastur Tanya Dubash Amit Choudhury Nitin Nabar Saleem Ahmadullah Keki Elavia

Management Team Adi Godrej Nadir Godrej Tanya Dubash Nisaba Godrej Pirojsha Godrej A. Mahendran A. Mahendran Balram Yadav

CH-1 PRINCIPLES OF ECONOMICS

(1) Company face trade off in making a investments inmarketing for new launches.

For launching or making a new investment in electricals and

appliance company face trade off that that they assure more output

with a same level of input means showing an efficiency.

The chairman of a company,Adi Godrej belive that company’s

strong performance is a reflaction of a clear strategic focus and

superior execution with more productive efficiency.

Company also except our profit performance to improve on the

back of stronger traction from their launches and favourable input

Prices.

(2) Cost of something is what one giveup (Opportunity Cost) to get it

It is related to a decision of company’s investment proposal

and project undertakings.

Company taking a decision related to investment more in

a Properties , Chemicals , Services and Agro businesses rather than

Electricals and Consumer goods.

Even though company established a good position inconsumer

Goods, in present year they go with a higher investment and different

strategic decisions related to the different isuues of products category

and its development.

In a tough operating environment,company’s endeavour focus

On represent the company’s growth and opportunity in diverse array of

Business.

(3) Rational People think at the Margin

For analysing Cost-benefit godrej company always look for a

how muh is the net addition in different services and products offered

by them.

During the time, they also go through the rational behavior of the

customer and purchasing power of the customer.

ex. Cost of purchasing consumer durables or purchasing of electricals.

there is a historical cost is occurred in company’s different

initiatives and other under takings but here hstorical (sunk) cost is not

considered.

Total Revenue= RS.21600 crore

Implicit costs of Godrej Electricals = 3200 crore

Explicit costs of Godrej Electricals = 4400 crore

(4) People respond to Incentives

It represents a something that includes a person to act towards a

incentives given by a company.

Godrej provides a incentives towards large purchase of by

customers of electricals products and also provides a festival discount on

a special offer to purchase of a products of Godrej Electronics.

Peoples also prefer to puchase a products provided or offered bya

Godrej Electricals and other consumer durables.

Positive economic incentives reward people financially for making

certain choices and behaving in a certain way.

Coupons, sales, freebies, discounts, and rewards can be positive economic incentives.

(5) Trade can make every one better off

It represents a rather than being self-sufficient,people can

specialised in producing one good or services andexchange it for

other goods.

Godrej electricals make a import and export with a European

countries,Asia,Africa,Latin America.

Godrej electricals get a raw materials from this companies and

also supply a finished product in this company for their product

accomplishment and Future business relations.

Indonesia is also one of the greater supplier of raw material to

the Godrej electricals and other group of Godrej companies.

(6) Markets are usually a good way to organised economic activity

In a business and corporate world Godrej electrical have

large many no. of byuer and seller in terms of a supplier and customer

In india there is a mixed economy so according to company

also decide a what to produce,how to produce and how much to

produce and also decide a potential buyer to buy a products of a

Company’s portfolio.

In a particular situation, company also follow capitalism

situation which is market oriented towards a company’s product.

Due to BRICS agreement of INDIA,Godrej electronics has to

follow a guidelines and norms regarding a trade agrrement and also

perform according to market scenario.

(7) Goverments can some times improve market outcomes

Due to indian governments acts Godrej electronics also follows

act like:

MRTP act

FEMA act

FERA act and many more.

Due to governments improvement godrej relax a fair amount of import

and export duties .Government also provide a certain subsidiy on a

particular product produce by a company.

Government also control over black marketing of a product

Government also make a restriction of Godrej’s chemical Pollution

which is harmful to people and society as a whole.

Government also monitor the external operations of the Godrej

electronics

(8) A country’s standard of living depends on its ability to produce goods & services

India is such a country that per capita income is high

compare to under developed countries and that shows the peoples of

a country are capable enough to purchase or consume a products

that serves by a companies.

Purchasing power parity of a people decide that their standard of

living and its way.

Due to country’s higher standard of living ,companies have good

equipment to produce a good,skillfull employees and well equipped

technology.

Godrej company is such that they take a advantage of this such

environment with producing a qualitable products at fair prices.

(9) Prices rice when government prints too much money

When there is a supply of a money is increased in a market

therfore, inflation also may increased substantially and governments

needs to solve this problem with a following:

- Demand pool inflation

- Cost pool inflation

Godrej Electronics mainly deals with a demand pool inflation because

of company ‘s qualitable products with a greater productivity to

produce a product.

In the inverse relationships of a inflation and unemployment company

can some times benefited also by tackling in a boom and recession

period to take care of suppplier and customer of a company.

(10) Society faces a short term trade off between inflation and unemployment

Inflation means increased in the general level of prices.

In a inflation company can’t sell a product as sell in normal days

because of that company’s efficiency decrease and it may cause

overall effect of a companies production cycle.

In a unemployment people not have a much saving due to not having a

employment and because of this peoples efficiency to purchase is

decrease and due to demand of company’s product is also decreased.

Due to all reason company’s effectiveness may cause and company

can not take a right decision and due to society face a short term

tradeoff

CH-2 THINKING LIKE AN ECONOMIST

Production Possibilities Frontier:

Point on graph Production PIRE PDS

A 500 0

B 400 1000

C 250 2500

Production Posibility curves shows whether resources used

judiciusly or not. It determines the Develop,underdevelop and developingeconomy.

GRAPHICAL PRESENTATIONS OF PPF

CH-4 MARKET FORCES OF SUPPLY AND DEMAND

Products of a Godrej Electronics : Industrial Electronics & Automation (IEA) Compressed Air Solutions (CAS) Power Infrastructure and Renewable Energy (PIRE) Power Distribution Solutions (PDS) Green Building Consultancy Services (GBCS)

Substitutes of Godrej Electronics Product:

Industrial Electronics & Automation (IEA)

AC motor drive/Inverter

AC Servo Motor and Drive

Temperature controller

Programmable logic controller, PLC

(2) Compressed Air Solutions (CAS)o Energy Audits & Reportso Energy Saving Control Systems

(3) Power Infrastructure and Renewable Energy (PIRE)o Electrical Solutions for Residential & Commercialo Electrical Solutions for Industries

(4) Power Distribution Solutions (PDS)o Godrej Electrak Lighting Trunkingo Under Floor Trunkingo Overhead Trunking

(5) Green Building Consultancy Services (GBCS)o Green Building Design Consultancyo Building Simulationso Building Commissioning Services

Complementary goods of Godrej Electronics:o Compressed air dryero Automatic drain valveso PLC Automationo Machine Automationo Air Insulated Substationso Transmission Lines  

Controllable factors of Godrej’s product: Price of commodity Choices & Preference of a customer Availability of a product Seasonal demand of a product Sales after services

Uncontrollable factors of Godrej’s product: Income of a consumer Price of substitute Designs of electrical machines Demand of a electrical equipments