ub group
TRANSCRIPT
Group Holding Structure
(UB City Project)Investments Real Estate
Spirits Business
United Spirits
Shaw Wallace Ltd
BeerBusiness
United Breweries
Millenium Alcobev
Aviation Others
Kingfisher
Airlines Ltd.
Aventis Pharma
Mangalore Chemicals &
Fertilizers
UB Engineering
UB (Holdings) Ltd.
(36.54%)(37.50%)
(50%)
(100%)
(10.28%)
(30.44%)
(34.74%)
(55%)
( Erstwhile McDowell & Co Ltd)
(75%)
Air Deccan (26%)
Whyte & Mackey
UB Group composition
59%17%
14%
3% 6% 1%
Spirits Beer Fertilizer
Engineering Airlines Pharma
Year : 2006
Intensity of Competition:• Number of major competitors are less• Industry growth rate is more• Relative size of competitor is large• Buyers switching cost is low• Exit barriers are high• Competitor less diversified
Threat of Substitutes:• Relative price of Substitute is same and low• Switching cost of Buyer is low• Relative Quality of substitute is different
Bargaining power of the buyer• Number of buyers are high• Enough options in form of product• Buyers uses multiple sources• Buyers threats to backward integration is low• Importance of product to the buyers varies based on customer profile
Threat of New Entrants:• High Economies of Scale• Less differentiated product so cannot be copied• High capital Requirement• Switching cost to buyer is low• Less access to distribution channel• Stringent Government Policies and taxes• High Industry Growth
Bargaining power of the Suppliers:• Number of organized suppliers are less• Availability of substitute input is less• Suppliers threat to forward integration is low• Buyers threat to backward integration is high
USL is merged entity of:◦ erstwhile McDowell & Co. Limited,◦ Phipson Distillery Limited,◦ United Spirits Limited,◦ Herbertsons Limited,◦ Triumph Distillers and Vintners Private Limited,◦ Baramati Grape Industries Limited,◦ United Distillers India Limited,◦ Shaw Wallace Distilleries Limited.
United Breweries LTD.:◦ 37.5% Heineken, 37.5% Mr. Mallya, 25% Public,
◦ Millennium Alcobev,
USL acquired: Balaji Distilleries Limited in 2008,
USL acquired: acquired AP–based, Tern Distilleries, in 2009,
USL acquired: Glasgow-based Whyte and Mackay,◦ Brands: The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar
vodka and the eponymous Whyte & Mackay blended Scotch.
USL: acquisition of Bouvet Ladubay in 2006,
Kingfisher airlines took over Deccan airlines,◦ The primary reason here was to expand business and reduce
competition,
Final Horizontal Merger Deal…
From the Kingfisher’s Point of view - To start overseas business(May 2005) - For the expansion purpose - Survive from the losses (577 Crore
loss) From the Air Deccan’s Point - To make the profit &
overcome losses(418 Crore loss)
•Signature•Bagpiper
•Mc Dowell no 1•Antiquity Blue
•Director Special
•Royal Challenge
BCG MATRIX- WHISKEY
% MARKETGROWTH
5X RELATIVE MARKET SHARE 0.1X
15%
40%
-5% 1X
UNRELATED DIVERSIFICATION
Mangalore Chemicals and Fertilizers Limited(1976)
UB Engineering (1977) Aventis Pharma VMSRF(research and
developmant) (1987) Kingfisher Airlines
(2005) UB City Project(Real
estate)
UNRELATED DIVERSIFICATION
Mangalore Chemicals and Fertilizers Limited(1976)
UB Engineering (1977) Aventis Pharma VMSRF(research and
developmant) (1987) Kingfisher Airlines
(2005) UB City Project(Real
estate)
RELATED DIVERSIFICATION•United Spirits Ltd(1951)•United Breweries Ltd (1915)•UB Global International Trading
RELATED DIVERSIFICATION•United Spirits Ltd(1951)•United Breweries Ltd (1915)•UB Global International Trading
•Force INDIA F1•Royal Challengers (2007)
•Force INDIA F1•Royal Challengers (2007)
Inbound LogisticUB - Beer is brewed in either the company’s
owned or non-owned Breweries .- Company also has its franchise for the
production of the beer- network of 23 breweries- Contract farming initiatives in the state of
Punjab- 51% stake in maltex malster
SABMiller - "Progress through Partnership“- 15 centers & 8000 farmers - Distribution of certified seeds- Operates 17 breweries and 16 bottling
plants
OUTBOUND LOGISTICSUB- Use third party to distribute product.
SABMiller - Adopted transportation and logistics
management solutions from JDA Group Inc
OPERATIONS:-UB- The Central Scientific Laboratory (CSL)- Quality Management Systems on the lines
of ISO 9000SABMiller - Waste minimization drive - Follows HACCP Certification Source – “Interview with Gary Whitlie “ 3rd April 2009 ,
Budapest Business Journal
Distribution channel - Strong distribution channel - 3,00,000 point of sales MARKETING/SALES- Quality marketing as well trained sales force to
sell the product in India .- Free gifts to the customers - Referred to as India's Richard Branson- Sports Sponsorship - Every second 4 bottles of Kingfisher bottles are
sold.
Distribution channel- network of 53 distribution centers - contracted distributors and franchised
distribution centers.
UB- contract farming- 51% stake in maltex malster SABMiller - 15 centers & 8000 farmers
UB- Complete automated plant by the Allen Bradley system.- Reduction in cost , cycle time .
SABMiller - Zero-waste operations - Complete automated plant
TECHNOLOGICAL
MCF
UBL
USL
ENGG & PHARMA
HIGH
MEDIUM
LOW
MARKET ATTRACTION STRON
GMEDIU
MWEEK
HARVEST / DIVEST
INVEST / GROWTH
EARNING & SELECTIVITY
BUSINESS STRENGTH
GE MATRIX
FKF