About BHEL

• Bharat Heavy Electricals Limited (BHEL) is an integrated power plant equipment manufacturer and one of the largest engineering and manufacturing companies in India in terms of turnover

• Established in 1964, BHEL ushered in the indigenous Heavy Electrical Equipment industry in India.

• It is engaged in the design, engineering, manufacture, construction, testing, commissioning and servicing of a wide range of products and services for the core sectors of the economy, viz. Power Transmission Industry, Transportation, Renewable Energy, Oil & Gas and Defence.

• It has 15 manufacturing divisions, two repair units, four regional offices, eight service centres, eight overseas offices and 15 regional centres and currently operates at more than 150 project sites across India and abroad. Most of its manufacturing units and other entities have been accredited to Quality Management Systems (ISO 9001:2008), Environmental Management Systems (ISO 14001:2004) and Occupational Health & Safety Management Systems (OHSAS 18001:2007).

• It is the 12th largest power equipment manufacturer in the world. In the year 2011, it was ranked ninth most innovative company in the world by US business magazine Forbes.

• BHEL is the only Indian Engineering company on the list, which contains online retail firm Amazon at the second position with Apple and Google at fifth and seventh positions, respectively. It is also placed at 4th place in Forbes Asia's Fabulous 50 List of 2010

• It is one of India's nine largest Public Sector Undertakings or PSUs, known as the Navratna’s or 'the nine jewels'

Swot analysis of BHEL

Strength

• Good corporate image • Complete range of products for transmission

and distribution• Established Brand Name• Considered to be having design ability• Market Dominance in the Indian Power

Sector• Cost Competitiveness

Weakness

• The procurement process in the company is cumbersome and subject to auditing

• Low exposure to the needs and dynamics of distribution business

• Role clarity on the requirement of being an equipment supplier or a solution provider

• Acceptance of customers to execute low value high volumes jobs

• Financing Capability

Opportunity

• Huge investment leading to greater demand of goods and services

• Demand leading to industry operating at full and over capacity

• Early birds to learn faster and achieve repeat orders• Formation of business groups and tie ups for joint

bidding• Healthier working environment and increased private

sector participation in operation of distribution circles also.

Threats

• Purchase preference may be extended to distribution sector

• Increased in number of small contractors leading to price wars

• Emergence of new players in the market.• Political pulls and pressures may jeopardize

the hole process, raising alarm about the privatization and being anti-people

Porters five force model

substitutes

• Have many substitutes that might pose a threat

• Has less diversification with sectors so that concentrated focusing on the respective sector avoids chances of getting substituted

• Has an order book worth thousands of crores

Potential of new entrance

• Competitive price

• Many orders are captured in recent times

• Existing tactics in the market will not help in the current scenario

suppliers

• Materials, parts, components and other resources

• Suppliers are well diversified across the globe

• Prompt delivery by suppliers are ensured by BHEL

buyers

• Wide customer base in India and in all parts of the world

• With excellent customer satisfaction orders are booked for the next two years{information from employee}

Rivalry among competitors

• Creating competitive advantage to gain bigger market share

• Acquisitions, mergers, and joint ventures in other countries

• Technological improvements

Value chain analysis

Value Chain component Results on PSEs

Infrastructure Excellent Infrastructure

Human Resource Management

High manpower cost and low labour productivity

Technology Development Out dated technology or technology follower, most of them are in low technology areas.

Procurement Highly cumbersome and slow

Inbound logistics Highly cumbersome and slow

Operations Process inefficient

Outbound logistics Slow

Marketing and Sales Mostly through PSE employees , no sales network

Services Mostly through PSE employees, no servicing network

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