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CONTENTS
SLNO TITLE Page no
1 EXECUTIVE SUMMARY 1
2 INTRODUCTION 2
4 PROFILE OF NALCO 4-10
5 REVIEW OF LITERATURE 11-25
6 ANALYSIS AND FINDINGS 25-30
9 PRICING PROCEDURE 31
12 CUSTOMER SATISFACTION 32
13 PROMOTIONAL PROCEDURE 37-38
14 SUGGESTIONS 39
15 CONCLUSION 40
16 BIBLOGRAPHY 41
EXECUTIVE SUMMARY
Aluminum represents the second largest metals market in the world. Growing demand
for the lightweight metal is fuelled largely by the booming Chinese economy which
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already consumes a quarter of the worlds aluminium production. Analysts predict
an annual growth rate of 8 to 16% in the Chinese automotive industry up to 2010, a 15%
increase in construction expenditure in 2011 and a minimum of plus 16 million annual
growths in urban population during the next 8 years. According to analysts these factors
will combine to see China consume 36% of worlds aluminium production as early
as 2010.
Aluminium Industries in India is one of the leading industries in the Indian economy. The
growth of the aluminum Metal industry in India would be sustained by the diversification
and exploration of new horizons for the industry. India has huge deposits of natural
resources in form of minerals like copper, chromites , iron ore, manganese, bauxite, gold,
etc. The India aluminum industry falls under the category of non iron based whichinclude the production of copper, tin, brass, lead, zinc, aluminum, and manganese.
The main operations of the of the India aluminum industry is mining of ores, refining of
the ore, casting, alloying, sheet, and rolling into foils. At present, Hindalco and Nalco are
one of the most economical in the production of aluminum in the world. For the
sustenance of the growth the aluminum industry in India has to develop research and
development units to assist the production and improve on the quality measures to keep a
stringent quality control.
Marketing strategy is one of the important parts of companys development. The
objective of this study was to help NALCO to know its own position in comparison to
its competitors; to know whether the strategy used by the company is effective; and to
provide a proactive, planed & informed approach to its own strategies in order to gain an
upper hand. The study on Marketing strategy is done by taking all aspects of strategy
very keenly like SWOT, BCG , 7S MODEL , 4Ps. and others procedures.
INTRODUCTION
In the present competitive world every company wants to be the best in their segment of
business. So, company identifies its competitors with whom it has to compete and
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according to it the company makes its strategy to survive in the market. If the company
cannot compete in the market then it will become a dog in the market. Now-a-days each
and every company is too aggressive to follow or lead the market. Therefore, it has
become imperative to study the
Marketing strategy of the company and renew it time and again.
Coming to the aluminium industry, this is one of the leading industries in the Indian
economy. The growth of the aluminum Metal industry in India would be sustained by the
diversification and exploration of new horizons for the industry. So the proper use of
marketing strategy is very much important and that to in a planed way. Keeping these
facts in view this study was conducted to know the growth of NALCO as well as to find
opportunities for expansion of business and capturing the present market. The analysis of
marketing strategy of NALCO was based on the following parameters: 1) The Marketing
Mix (The 4 P's of Marketing); 2) The BCG Growth-Share Matrix; 3) SWOT Analysis; 4)
7S Framework. And others...
OBJECTIVES OF THE STUDY
To help the company to understand its position with respect to its major
competitors in the market, and provide business competitive intelligence.
To understand the present Marketing strategy deeply so to provide a proactive,
planned and informed approach to its future strategies in order to gain an upper
hand.
To find out companys strengths and weakness and also the threats as well as
opportunities.
To find out the work style of man power.
To observe the action of competitors, that might help the company to learn more
about the market.
To show the company new ways of expanding the business
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The relevance of the topic for the company
Today is the age of competitions so each and every company is aggressive in capturing
new opportunities available to gain market share. If the company is aware of its position
respect to its major competitors in the market, and have business competitive intelligence
can act proactively to gain an upper hand. Also the company should have knowledge
about the effectiveness of their products. Apart from these this study also helps the
company to know its strengths and weakness and also the threats as well as opportunities;
its work style of manpower; its competitors; the procedure of pricing. Domestic
procedure, export procedure and show new ways of expanding the business. These are
quite pertinent aspects for the growth of the company.
Limitations of the Study
The limitations of the study are linked to information gathered from various sources and
the interpretation of the information. Also with the exception of a few information
sources like forecasted financial statements, this is particularly the case if there are a lot
of structural changes happening in the sector and all the players are expected to have
dynamic Marketing strategy to capture their market.
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PROFILE OF NALCO
Mission
"To develop and strengthen technology expertise pertaining to Bauxite, Alumina and
Aluminium in the next five years, which will enable NALCO to be self sustained in the
field of Bauxite mining, Alumina Refining and Aluminium Smelting technology.
To achieve growth in business with global competitive age providing satisfaction to the
customers, employees, share holders and community at large.
Vision
"To set up world class, state of the art research and development facilities to enable
NALCO to achieve excellence and sustainability in process, product and technology in
the field of Bauxites, Alumina, Aluminum, Power and allied areas including downstream
products.
Objectives
To maximize capacity utilization.To optimize operational efficiency and productivity.
To maintain highest international standards of excellent in product quality, cost efficiency
and customer service.
To provide a steady growth business by technology up gradation, expansion of
diversification.
To have global presence and earn foreign exchange.
To maintain leadership in domestic market.
To install financial discipline at all levels for achieving cost and budgetary controls ,
optimize utilization of working capital and effective cash flow management
To maximize return on investment
To develop a strong R&D base and increase business development activities.
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To promote a result oriented organizational ethos and work culture that empowers
employees and helps realization of individual and organizational goals.
AWARDS
Indra priyadarshini Vrikshamitra Award by Govt.of India-1994
First CAPEXIL Export Award-1988
London Metal Exchange Registration-May 1989
First EEPC Export Award-1998-99
Indra Gandhi Paryavaran puraskar by Govt. of India-2000
FIEO Niryat Shree Awartds-2005-06
Navaratna Status-2008
Premier Trading House Status-2009
500th shipment of Alumina from Vizag port-2010
Best listed CPSE Awards-2010
ISO 9001:2000,ISO 14001,OHSAS 18001 & SA 8000 Certifications
Nalco achieves record production and sales in 2010-11
Nalco Today
Today as an ISO 9001 company, Nalco has emerged as the largest integrated Bauxite-
Alumina-Aluminium complex in Asia enabling India to witness a quantum jump in
Alumina and Aluminium production. The company for the final time created exportable
surplus Alumina and Aluminum production. The company for the first created exportable
surplus in Alumina and helped India top focus on its massive Bauxite resources in the
east coast export oriented Aluminum plants.
Segments of Nalco
NALCO has emerged as the largest integrated Bauxite-Alumina-Aluminium complex in
Asia enabling India to witness a quantum jump in Alumina and Aluminium production.
The company for the final time created exportable surplus Alumina and Aluminium
production. The company for the first created exportable surplus in Alumina and helped
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India top focus on its massive Bauxite resources in the east coast export oriented
Aluminum plants. The integrated complex has five segments like Bauxite mine,
Aluminum refinery, Aluminum smelter, Captive power plant and port facilities.
Raw Materials Used
The basic raw materials required for the production of aluminum are electronic energy
alumina, CGM line white brand, caustic soda, hydrate alumina, some other raw materials
required for smelter like calcinade petroleum, coke and coal for pitch, available from
Baruni-Haladia-refineries and vizag steel plant respectively, the actual requirements of
other raw material of this plant as follows.
Calcined petroleum coke-87.100 tones
Coal tan pitch-27,000 tones
Heavy fuel oil 12,390 tones
Heal transper fluid- 3000
Process water- 20000M
Salient Features
Micro processor based burner management system for optimum thermal efficiency.
Computer controlled data acquisition system for online monitoring.
Automatic turbine run-up system
Specially designed barrel type high pressure turbine.
Electrostatic precipitators with advanced intelligent controllers.
Wet disposed of ash.
The raw water for the plant is drain from river Brahmani through a 7 KM long double
circuit pipe line, discharging 7200 m3 /hour of water. The coal demand is met from a
mine of 3.5 million tone capacity opened up for Nalco at bharatpur in talcher by
Mahanadi coal fields ltd. The power plant is interconnected with the static grid.
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Products
Aluminium Metal
(CG, EC&LME grades)
Ingots (Standard Ingots,sow Ingot,T-ingots)
Wire Rods
Billets (in 5 size)
Alloy wire rods
Cast strips
Alumina & Hydrate
1.Calcinated Alumina
2.Alumina hydrated
Specialty Alumina & Hydrates
Rolled products (coils & sheets)
(INGOTS) (SOWS INGOTS)
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(BILLETS) (T-INGOTS)
(WIRE RODS) (ROLLED PRODUCT)
Plant Location
Nalco Nagar is situated within 5km of Angul town. Angul was once a tidal state. It is
fairly big and bustlingly town on the national highway no.42 which is the main highway
connecting Bhubaneswar with Raipur (MP), sambalpur, sundarghar and Rourkela. Nalco
has established its smelter plant, captive power plant and its town ship close to the
national highway. The place is easily accessible from Cuttack and Bhubaneswar by road
and rail. Today in the vicinity of Angul a large number of industries have come up. The
other important industry in and around this place are heavy water of atomic energy,
Commission talcher, coal mines of mahanadi coal fields limited and thermal power plants
of NTPC.
The Nalco town ship known as Nalco nagar is modern and well planned. In addition to
2947 dwelling units and trainees hostel with 300 rooms, Nalco nagar may civic facilities
like community centres, clubs , stadium , swimming pool, market complexes etc. it has
establish 50 bedded hospital with ultra modern facilities.
Organizational Structure
Nalco is a govt. of enterprise under the administration control of the ministry of mines.
The company is managed by board of directors appointed by the president of India. The
board consists of 16 directors including the chair-cum managing director of the company.
There are 6 full time functional directors heading production, finance project & technical,
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personnel &administrative disciplines. There are our senior govt. officials nominated to
the board as directors on ex-officio basis. Besides there are 2 non official directors in the
board appointed to present the interest of financial institution, allied industry & R&D
objectives of the company. Thus the board of company is a full of highly experienced &
outstanding potentials drawn from various fields of specialization.
The management control system is based on delegation of authority & individual
accountability for results. The responsibility and authority to take decisions on various
matters are delegated by the chairman-cum-MD to different levels in the management.
Human Resource
About 7393 persons possessing a verity of skills, qualifications and competence are at the
services of Nalco, Nalco is truly youth with the average age of the employees being
below 40 years. Starting with a core group of 262 employees in the 1982, the progressive
growth in man power has taken place in a planned manner matching the different stages
of the project.
Composition of Manpower
Skilled personnel-3717
Semi skill & unskilled personnel- 1041
Executives-1783
Supervisors-852
TOTAL : 7393 (Human Resources)
Overall Industrial Relations Situation
There are trade unions operating in the organization. But they are much concerned with
their rights rather than duties. The trade union leaders are much interested in the training
tours and other benefits provided by the company and least concerned about the workers
problem and other activities for the development of the organization. They are guided by
their self interest. Common employees are not much committed towards trade unions.
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There is no recognized trade union. Before 3/4 year there was a trade union was
recognized by secret- ballot method
Organizational Culture
Nalco being a profitable public sector unit concerned about good relationships among the
superior and subordinate, employee etc. in normal time people work loosely, thinking
that the company is fulfilling its target. So there is no need for hard work. But in 1998
while it was facing a bad situation people devoted their heart and soul to the organization.
The worked for day and night and brought the situation under control.
The employees of Nalco are given a very big package with number of incentives and
other facilities. But these actually do not motivate employees. Because incentives work
for a short time. It is the fear motivation which works behind every employees and makes
the employee motivated towards their respective jobs. Employees in Nalco are
individually accountable towards their work. If a task is given to them, they accomplish
the task in a proper manner and in a proper time.
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REVIEW OF LITERATURE
Marketing Strategy
A marketing strategy is a process that can allow an organization to concentrate its limited
resources on the greatest opportunities to increase sales and achieve a sustainable
competitive advantage. A marketing strategy should be centered around the key concept
that customer satisfaction is the main goal.
A marketing strategy is most effective when it is an integral component of firm strategy,
defining how the organization will successfully engage customers, prospects, and
competitors in the market arena. Corporate strategies, corporate missions, and corporate
goals. As the customer constitutes the source of a company's revenue, marketing strategy
is closely linked with sales. A key component of marketing strategy is often to keep
marketing in line with a company's overarching mission statement.
Basic theory
The basic theory of marketing strategy is:
Target Audience
Proposition/Key Element
Implementation
The Five D's
Tactics and actions
A marketing strategy can serve as the foundation of a marketing plan. A marketing plan
contains a set of specific actions required to successfully implement a marketing strategy.
For example: "Use a low cost product to attract consumers. Once our organization, via
our low cost product, has established a relationship with consumers, our organization will
sell additional, higher-margin products and services that enhance the consumer's
interaction with the low-cost product or service."
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A strategy consists of a well thought out series of tactics to make a marketing plan more
effective. Marketing strategies serve as the fundamental underpinning of marketing plans
designed to fill market needs and reach marketing objectives[5]. Plans and objectives are
generally tested for measurable results.
A marketing strategy often integrates an organization's marketing goals, policies, and
action sequences (tactics) into a cohesive whole. Similarly, the various strands of the
strategy , which might include advertising, channel marketing, internet marketing,
promotion andpublic relations can be orchestrated. Many companies cascade a strategy
throughout an organization, by creating strategy tactics that then become strategy goals
for the next level or group. Each one group is expected to take that strategy goal and
develop a set of tactics to achieve that goal. This is why it is important to make each
strategy goal measurable.Marketing strategies are dynamic and interactive. They are
partially planned and partially unplanned. See strategy dynamics.
Types of strategies
Marketing strategies may differ depending on the unique situation of the individual
business. However there are a number of ways of categorizing some generic strategies. A
brief description of the most common categorizing schemes is presented below:
Strategies based on market dominance- In this scheme, firms are classified based on
their market share or dominance of an industry.
Typically there are three types of market dominance strategies:
Leader -
Challenger -
Follower
Porter generic strategies - strategy on the dimensions of strategic scope and strategicstrength. Strategic scope refers to the market penetration while strategic strength refers to
the firms sustainable competitive advantage.
Product differentiation
Market segmentation
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Innovation strategies - This deals with the firm's rate of the new product development
and business model innovation. It asks whether the company is on the cutting edge of
technology and business innovation. There are three types:
1.Pioneers 2.Close followers 3.Late followers
Growth strategies - In this scheme we ask the question, How should the firm grow?.
There are a number of different ways of answering that question, but the most common
gives four answers:
Horizontal integration
Vertical integration
Diversification
Intensification
A more detailed scheme uses the categories:
Prospector
Analyzer
Defender
Reactor
Marketing warfare strategies - This scheme draws parallels between marketingstrategies and military strategies.
Strategic models
Marketing participants often employ strategic models and tools to analyze marketing
decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad
understanding of the strategic environment. An Ansoff Matrix is also often used to
convey an organization's strategic positioning of their marketing mix. The 4Ps can then
be utilized to form a marketing plan to pursue a defined strategy.
The Consumer-Centric Business
There are a many companies especially those in the Consumer Package Goods (CPG)
market that adopt the theory of running their business centered around Consumer,
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Shopper & Retailer needs. Their Marketing departments spend quality time looking for
"Growth Opportunities" in their categories by identifying relevant insights (both mindsets
and behaviors) on their target Consumers, Shoppers and retail partners. These Growth
Opportunities emerge from changes in market trends, segment dynamics changing and
also internal brand or operational business challenges.The Marketing team can then
prioritize these Growth Opportunities and begin to develop strategies to exploit the
opportunities that could include new or adapted products, services as well as changes to
the 7Ps.
The Marketing Mix (The 4 P's of Marketing)
Marketing decisions generally fall into the following four controllable categories:
Product
Price
Place (distribution)
Promotion
The term "marketing mix" became popularized after Neil H. Borden published his 1964
article, The Concept of the Marketing Mix. Borden began using the term in his teaching
in the late 1940's after James Culliton had described the marketing manager as a "mixer
of ingredients". The ingredients in Borden's marketing mix included product planning,
pricing, branding, distribution channels, personal selling, advertising, promotions,
packaging, display, servicing, physical handling, and fact finding and analysis. E. Jerome
McCarthy later grouped these ingredients into the four categories that today are known as
the 4 P's of marketing, depicted below:
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Fig 4.The Marketing Mix
These four P's are the parameters that the marketing manager can control, subject to the
internal and external constraints of the marketing environment. The goal is to make
decisions that center the four P's on the customers in the target market in order to create
perceived value and generate a positive response.
i) Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are
some examples of the product decisions to be made:
Brand nameFunctionality
Styling
Quality
Safety
Packaging
Repairs and Support
Warranty
Accessories and services
ii) Price Decisions
Some examples of pricing decisions to be made include:
Pricing strategy (skim, penetration, etc.)
Suggested retail price
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Volume discounts and wholesale pricing
Cash and early payment discounts
Seasonal pricing
Bundling
Price flexibility
Price discrimination
iii) Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution
decisions include:
Distribution channels
Market coverage (inclusive, selective, or exclusive distribution)
Specific channel members
Inventory management
Warehousing
Distribution centers
Order processing
Transportation
Reverse logistics
iv) Promotion Decisions
In the context of the marketing mix, promotion represents the various aspects of
marketing communication, that is, the communication of information about the product
with the goal of generating a positive customer response. Marketing communication
decisions include:
Promotional strategy (push, pull, etc.)
Advertising
Personal selling & sales force
Sales promotions
Public relations & publicity
Marketing communications budget
Limitations of the Marketing Mix Framework
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The marketing mix framework was particularly useful in the early days of the marketing
concept when physical products represented a larger portion of the economy. Today, with
marketing more integrated into organizations and with a wider variety of products and
markets, some authors have attempted to extend its usefulness by proposing a fifth P,
such as packaging, people, process, etc. Today however, the marketing mix most
commonly remains based on the 4 P's. Despite its limitations and perhaps because of its
simplicity, the use of this framework remains strong and many marketing textbooks have
been organized around it.
The BCG Growth-Share Matrix
The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce
Henderson of the Boston Consulting Group in the early 1970's. It is based on the
observation that a company's business units can be classified into four categories based
on combinations of market growth and market share relative to the largest competitor,
hence the name "growth-share". Market growth serves as a proxy for industry
attractiveness, and relative market share serves as a proxy for competitive advantage. The
growth-share matrix thus maps the business unit positions within these two important
determinants of profitability.
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Fig 5. BCG Growth-Share Matrix
This framework assumes that an increase in relative market share will result in an
increase in the generation of cash. This assumption often is true because of the
experience curve; increased relative market share implies that the firm is moving forward
on the experience curve relative to its competitors, thus developing a cost advantage. A
second assumption is that a growing market requires investment in assets to increase
capacity and therefore results in the consumption of cash. Thus the position of a business
on the growth-share matrix provides an indication of its cash generation and its cash
consumption.
Henderson reasoned that the cash required by rapidly growing business units could be
obtained from the firm's other business units that were at a more mature stage and
generating significant cash. By investing to become the market share leader in a rapidly
growing market, the business unit could move along the experience curve and develop a
cost advantage. From this reasoning, the BCG Growth-Share Matrix was born.
The four categories are:
Dogs - Dogs have low market share and a low growth rate and thus neither generate nor
consume a large amount of cash. However, dogs are cash traps because of the money tied
up in a business that has little potential. Such businesses are candidates for divestiture.
Question marks - Question marks are growing rapidly and thus consume large amounts
of cash, but because they have low market shares they do not generate much cash. The
result is a large net cash comsumption. A question mark (also known as a "problem
child") has the potential to gain market share and become a star, and eventually a cash
cow when the market growth slows. If the question mark does not succeed in becomingthe market leader, then after perhaps years of cash consumption it will degenerate into a
dog when the market growth declines. Question marks must be analyzed carefully in
order to determine whether they are worth the investment required to grow market share.
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Stars - Stars generate large amounts of cash because of their strong relative market share,
but also consume large amounts of cash because of their high growth rate; therefore the
cash in each direction approximately nets out. If a star can maintain its large market
share, it will become a cash cow when the market growth rate declines. The portfolio of a
diversified company always should have stars that will become the next cash cows and
ensure future cash generation.
Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is
greater than the market growth rate, and thus generate more cash than they consume.
Such business units should be "milked", extracting the profits and investing as little cash
as possible. Cash cows provide the cash required to turn question marks into market
leaders, to cover the administrative costs of the company, to fund research anddevelopment, to service the corporate debt, and to pay dividends to shareholders. Because
the cash cow generates a relatively stable cash flow, its value can be determined with
reasonable accuracy by calculating the present value of its cash stream using a discounted
cash flow analysis.
Under the growth-share matrix model, as an industry matures and its growth rate
declines, a business unit will become either a cash cow or a dog, determined soley by
whether it had become the market leader during the period of high growth.
While originally developed as a model for resource allocation among the various business
units in a corporation, the growth-share matrix also can be used for resource allocation
among products within a single business unit. Its simplicity is its strength - the relative
positions of the firm's entire business portfolio can be displayed in a single diagram.
Limitations
The growth-share matrix once was used widely, but has since faded from popularity as
more comprehensive models have been developed. Some of its weaknesses are:
Market growth rate is only one factor in industry attractiveness, and relative market share
is only one factor in competitive advantage. The growth-share matrix overlooks many
other factors in these two important determinants of profitability.
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The framework assumes that each business unit is independent of the others. In some
cases, a business unit that is a "dog" may be helping other business units gain a
competitive advantage.
The matrix depends heavily upon the breadth of the definition of the market. A business
unit may dominate its small niche, but have very low market share in the overall industry.
In such a case, the definition of the market can make the difference between a dog and a
cash cow.
While its importance has diminished, the BCG matrix still can serve as a simple tool for
viewing a corporation's business portfolio at a glance, and may serve as a starting point
for discussing resource allocation among strategic business units.
SWOT Analysis
SWOT analysis is a simple framework for generating strategic alternatives from a
situation analysis. It is applicable to either the corporate level or the business unit level
and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS)
stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework
was described in the late 1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth
Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL:
Irwin, 1969). The General Electric Growth Council used this form of analysis in the
1980's. Because it concentrates on the issues that potentially have the most impact, the
SWOT analysis is useful when a very limited amount of time is available to address a
complex strategic situation.The following diagram shows how a SWOT analysis fits into
a strategic situation analysis.
SWOT Profile
The internal and external situation analysis can produce a large amount of information,
much of which may not be highly relevant. The SWOT analysis can serve as an
interpretative filter to reduce the information to a manageable quantity of key issues. The
SWOT analysis classifies the internal aspects of the company as strengths or weaknesses
and the external situational factors as opportunities or threats. Strengths can serve as a
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foundation for building a competitive advantage, and weaknesses may hinder it. By
understanding these four aspects of its situation, a firm can better leverage its strengths,
correct its weaknesses, capitalize on golden opportunities, and deter potentially
devastating threats.
Internal Analysis
The internal analysis is a comprehensive evaluation of the internal environment's
potential strengths and weaknesses. Factors should be evaluated across the organization
in areas such as:
Company culture
Company image
Organizational structure
Key staff
Access to natural resources
Position on the experience curve
Operational efficiency
Operational capacity
Brand awareness
Market share
Financial resources
Exclusive contracts
Patents and trade secrets
The SWOT analysis summarizes the internal factors of the firm as a list of strengths and
weaknesses.
External Analysis
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An opportunity is the chance to introduce a new product or service that can generate
superior returns. Opportunities can arise when changes occur in the external environment.
Many of these changes can be perceived as threats to the market position of existing
products and may necessitate a change in product specifications or the development of
new products in order for the firm to remain competitive. Changes in the external
environment may be related to:
Customers
Competitors
Market trends
Suppliers
Partners
Social changes
New technology
Economic environment
Political and regulatory environment
The last four items in the above list are macro-environmental variables, and are addressed
in a PEST analysis.
The SWOT analysis summarizes the external environmental factors as a list of
opportunities and threats.
SWOT Profile
When the analysis has been completed, a SWOT profile can be generated and used as the
basis of goal setting, strategy formulation, and implementation. The completed SWOT
profile sometimes is arranged as Fig
When formulating strategy, the interaction of the quadrants in the SWOT profile becomes
important. For example, the strengths can be leveraged to pursue opportunities and to
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avoid threats, and managers can be alerted to weaknesses that might need to be overcome
in order to successfully pursue opportunities.
Strengths Weaknesses
1.
2.
1.
2.
3.
Opportunities Threats
1.
2.3.
1.
2.3.
Fig 5. SWOT profile
Multiple Perspectives Needed
The method used to acquire the inputs to the SWOT matrix will affect the quality of the
analysis. If the information is obtained hastily during a quick interview with the CEO,
even though this one person may have a broad view of the company and industry, the
information would represent a single viewpoint. The quality of the analysis will be
improved greatly if interviews are held with a spectrum of stakeholders such as
employees, suppliers, customers, strategic partners, etc.
SWOT Analysis Limitations
While useful for reducing a large quantity of situational factors into a more manageable
profile, the SWOT framework has a tendency to oversimplify the situation by classifying
the firm's environmental factors into categories in which they may not always fit. The
classification of some factors as strengths or weaknesses, or as opportunities or threats is
somewhat arbitrary. For example, a particular company culture can be either a strength or
a weakness. A technological change can be a either a threat or an opportunity. Perhaps
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what is more important than the superficial classification of these factors is the firm's
awareness of them and its development of a strategic plan to use them to its advantage.
7S FRAMEWORK
It's all very well devising a strategy, but you have to be able to implement it if it's to do
any good. The Seven S Framework first appeared in "The Art Of Japanese Management"
by Richard Pascale and Anthony Athos in 1981. They had been looking at how Japanese
industry had been so successful, at around the same time that Tom Peters and Robert
Waterman were exploring what made a company excellent. The Seven S model was born
at a meeting of the four authors in 1978. It went on to appear in "In Search of
Excellence" by Peters and Waterman, and was taken up as a basic tool by the global
management consultancy McKinsey: it's sometimes known as the McKinsey 7S model.
Managers, they said, need to take account of all seven of the factors to be sure of
successful implementation of a strategy - large or small. They're all interdependent, so if
you fail to pay proper attention to one of them, it can bring the others crashing down
around you. Oh, and the relative importance of each factor will vary over time, and you
can't always tell how that's changing. Like a lot of these models, there's a good dose of
common sense in here, but the 7S Framework is useful way of checking that you've
covered all the bases. The Seven Factors are:
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Fig 6. 7s Model
Strategy A set of actions that you start with and must maintain
Structure How people and tasks / work are organised
Systems All the processes and information flows that link the organisation together
Style How managers behave
Staff How you develop managers (current and future)
Superordinate Goals Longer-term vision, and all that values stuff, that shapes the
destiny of the organisation
Skills Dominant attributes or capabilities that exist in the organisation
There's a lot more to the 7S framework of course, especially how you apply it in practice.
It may appear as an outmoded concept in today's environment of "constant change and
learning", but the basic principle that you've got to watch a lot of factors all the time as
you implement any strategy still applies. Just don't let the apparent rigidity of the
framework make you heavy on your feet.
For more about strategy and strategic management in general, look out "Strategic
Management" by Dess & Miller (McGraw Hill 1993). It's not a bedtime read, but is a
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useful reference work of ideas and case studies. If you want more on the 7S model, read
Richard Pascale's subsequent "Managing on the Edge" (1990).
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ANALYSIS AND FINDINGS
Marketing Strategy Analysis of NALCO
4PS of NALCO
i) Products
Calcined alumina.
Alumina metal.
Zeolite.
Special products.
Alumina hydrate.
Rolled products.
ii) Pricing
The pricing strategy of NALCO is based on:
LME (London Metal Exchange). So, the price changes according to the changes in the
LME.
Demand of the( Al )market or demand of the customers.
Pressure from competitors. As Nalco also has some strong competitors , pricing is done
by keeping a keen view on the competitors.
Overall, the pricing strategy of Nalco generally updated at a monthly basis but it changes
according to the situation.
iii) Promotion
As the companys present market is a buyers market, So its not required to spend
money. but some where as a global company it need some promotion, NALCO use to do
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some small promotional activities, which we can see in form of CSR (Corporate Social
Responsibility) like organizing cricket matches, funding journals etc
iv) Place
Under this segment we will consider about how company move its products from place
of production to place of consumption. For this NALCO has its stockyards almost all
around the country which makes its logistics more efficient.The current stockyard are
1. BADDI
2. Bangalore
3. Biwandi
4. Chennai (SY)
5. Faridabad
6. Jaipur
7. Kolkata
8. Silvassa
9. Vizag
BCG GROWTH-SHARE MATRIX OF NALCO
STAR
T.Ingots
QUSTION MARK
Billets
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CASH COW
Aluminum sows
Calcined alumina
Alumina hydrate
DOG
Rolled products
Special products
Zeolite
Fig 7. BCG Growth-Share Matrix of Nalco
SWOT ANALYSIS OF NALCO
Strengths
It has a very rich bauxite mine.
Nalco is one of the lowest cost procedure in its segment .
It is one of the pioneer in the field of aluminium
It has a strong technical man power.
It uses one of the fully integrated operations
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Strong cash reserves with no debt
Robust volume growth on back of recent expansion plans.
Being a Navratna company it has a very strong good will.
Weakness
Being a public sector company , it has a slow decision making process compare to any
private sectors.
Shortage in coal linkages has lead to higher share of imported coal at relatively much
higher price.
The conservative policy like debt-free company during an major bull run also may
hampered the Growth in long run.
Its product mix basically targeting to primary product segments.
As Nalco is now in 30th year it needs new technologies to compete.
Opportunities
Despite current crisis, India is likely to remain second fastest growing economy
Government thrust on infrastructure would also continue albeit at modest pace
Automobile, consumer durables and engineering sectors are at very nascent stage
compare to global scale
Low per capita housing and booming retail industry would drive construction demand
Low per capita aluminum consumption compare with other countries offers a higher
growth
Rich Geological Resource base
Growing Skilled and Technical Human Capital.
Threats
Instability in LME aluminum price (currently at five year low) will affect margin badly
Significant disruption in demand in developed countries from key consumer segment
Competition from scrap imports and very high threat from substitute materials particular
plastics
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Progressive reduction in aluminum import tariffs
Bureaucratic nature of Government - Socio-Political interventions (in leasing mines)
Deficit infrastructure
7S STRATEGY MODEL DESCRIBING (NALCO)
Structure: How people and tasks / work are organized. NALCO is one of the well
organized organization. The role of every employee is very clear to them. They are
aware of the performance expected from them, So according to that they perform.
Strategy: A set of plan for the future actions that you start with and must maintain.
Strategy applied by NALCO is basically a long term strategy.
System: A set of actions that is according to the strategy. In system we will consider the
flow of information. Here the flow of information is from top to bottom i.e. the decision
is taken at the upper level.
Style: How managers behave. As NALCO is one of the navaratna certified organization,
it is very simple to say the upper level employees are very much cooperative to their
subordinates, because of which they are today at this stage.
Staff: How you develop managers (current & future ). The staffing in NALCO is very
good every department is headed by different chief manager, who are really deserving ,
and further more they are again provided with junior managers who are there to provide
cooperation. So we can say the span of control is wide for the director but it is very easy
to handle because of this staffing.
Superordinate Goals: Long term vision , and all that values stuff that shapes the destiny
of the organization . Super ordinates goals in case of NALCO is same as that of the
mission of the organization.
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Skills: Dominant attributes or capabilities that exist in the organization. As the selection
procedure of NALCO is very stringent, quality people are selected as employees.
Therefore NALCO has a good reservoir of skills.
PRICING PROCEDURE OF NALCO,INDIA
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The pricing committee of Nalco(domestic),fix the price of all the products according to
the demand & supply of market, prevailing LME price, Exchange rate, Inventory status
of NALCO,Govt. Policy (Tax, Duty) along with all the term & conditions of company.
CMD (Chairman-cum-Managing Director) is authorized to make appropriate changes in
the sale of the companys products as and when necessary based on the recommendation
of pricing committee to be constituted by CMD consisting of senior officers who would
review the market situation periodically and put it recommendations for approval.
CMD has constituted a pricing committee, consisting the following officer :
Executive Director (Marketing)
General Manager (Marketing)
Dy.General Manager (Marketing-Finance)
Dy General Manager (Marketing-Domestic)
CUSTOMER SATISFACTION OF NALCO
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The very success of any enterprise depends largely on its ability to satisfy and retain their
customers. Any business without a focus on customer satisfaction is at the mercy of the
market. Without loyal customers eventually a competitor will take away your customers
and your customer retention rate will decrease. A successful enterprise knows very well
what the key drivers of satisfaction are, the areas that will have the grea test impact in
improving cus tomers overal l percept ion of our service. Bes t practice
companies also monitor customer feedbacks over time and communicate a strong
message about their commitment to serve their customer. A s p e r t h e m a r k e t i n g
c o n c e p t , a f i r m c a n r e a l i z e a l l i t s b u s i n e s s g o a l s b y
g e n e r a t i n g c u s t o m e r satisfaction. The idea may sound somewhat utopian. In
reality, it is an eminently workable proposition.
The satisfaction is a function of perceived performance and expectations. If the
performance falls short of expectations , the customer is dissatisfied. If the performance
matches the expectations , the customer is satisfied. If the performance exceeds the
expectations, the customer is highly delighted. Many companies aim for high customer
satisfaction, because the customers who are just satisfied find it better to switch to other
companies when a better offer comes along. Those who are highly satisfied are much less
ready to switch. High satisfaction or delight creates an emotional bonding with the brand.
The result is high cu stomer loyalty. Xerox s senior managemen t believes that
a very satisfied or delighted customer is worth ten times as much to the company as
a satisfied customer. A very satisfied customer is likely to stay with Xerox many more
years and buy more than a satisfied customer will.
Benefits of Measuring Customer Satisfaction
Learning strategies for improving services
Learning customer expectations
Identifying common reasons for customer dissatisfaction
Improving customer retention
Making customers feel valued
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Uncovering missed opportunities to demonstrate your capacity to solve
pro blems and win back customers confidence
Improved competitive position
Helping to decide where best to spend improvement dollars to make sureyou spend it where it matters the most.
Major Customers of NALCO ( Domestic
NALC O plays a vit al role in the In dian Alumi nium industry. The Alumi niu m
pro ducing capacity of th e country has witn esse d a quantum jump afte r the
entry of NALCO. Through its quality products it gets about 800 direct reputed
customers and some of them are cited below:
JINDAL ALUMINIUM LTD
NATIONAL SMALL INDUSTRIES CORPORATION
HINDUSTAN SEALS LTD
BAJAJ AUTO LTD
GOETZE INDIA LTD
TATA MOTORS LTD
GANGA JAMUNA LTD
HIREN ALUMINIUM LTD
STERLITE INDUSTRIES LTD
METAL POWER COMPANY LTD
SUNDARAM CLAYTON LTD
INDIA PISTONS LTD
ORDNANCE FACTORY AMBAJHARI
HINDUSTAN AERONAUTICS LTD
BHILAI STEEL PLANT
ROURKELA STEEL PLANT
VISAKHAPATNAM STEEL PLANT
BOKARO STEEL PLANT
Customer Satisfaction Strategy Overview
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When we t alk about cus tomer service or sat is fact ion, we t alk about
creat ivity. It allows us to hand le or diffuse problems at hand or later on in the
process of conducting everyday business. We talk about how or rather what the
organization has to do to gain not only the sale but also the loyalty of the customer. He
wants to know the pay of the transaction both in the short and long term. We
want to know wha t the customer wants; we want to know if our customers are
satisfied. Satisfaction of course means that what we delivered to the customer met his /
her approval. We want to know if the customer is delighted and is willing to come back.
Measuring customer satisfaction is a sound business strategy because:
It is expensive to win new customers and customer retention is critical for business
success.
It is less expensive to sell additional products and services to existing, satisfied
customers.
Problems encountered by customers negatively impact their loyalty; if we
disappoint them they may start looking for alternatives.
The customer contact centre has significant impact on customer loyalty, and in many
businesses the call centre has more contact with the customer than any other part of the
business.
Most customers will not take the initiative to complain; they will not tell
you, they will tell their friends and co-workers how good or bad you were.
Word of Mouth is the best and the least expensive way of advertising and customers
are much more likely to tell others about negative experiences than positive experiences.
Tools For Tracking Customer Satisfaction Strategy
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Customer satisfaction surveys:
Studies show that although customers are dissatisfied with one out of every four
purchases, less than five percent will complain. Most customers will buy less or switch
suppliers. Responsive companies measure customer satisfaction directly by including
periodic surveys. While collecting customer satisfaction data, it is also useful to ask
additional question to measure repurchase intention and to measure the likelihood
or willingness to recommend the company and brand to others.
Complaint & Suggestion System:
A customer-centered organization makes it easy for customers to register
sugges tions and compl aints .Some customer-centered companies establish hotlines
with toll free numbers. Companies are also using websites and e-mails for quick two-way
communication
Ghost Shopping:
Companies can have people to pose as potential buyers to report on strong and weak
points experienced in buying the companys and competitors products. These mystery
shoppers can even test how the the companys sales personnel handle various situations.
Customer Complaints
When you receive a customer complaint, you know exactly where you stand
with the cus tome r. Thi s is especially true if the organization broadly interprets
customer complaints as any negative feedback that the organization receives. Whether
the complaint is justified or not is irrelevant; perception becomes the customers reality.
But trouble starts when organizations rely on customer complaints as their jointly gauge
of customer perceptions. The weakness inherent in relying solely on complaints is two
fold. First, many dissatisfied customers simply do not bother to complain.
They have decided that it is not worth the time and effort for them to communicate
the problem. In fact, they might just decide that it is not worth the risk of placing another
order. The organization might lose a customer and not even under stand what went
wrong. And it is much more expensive to regain a customer that to retain one. Second,
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complaints, by definition provide only negative feedback. An organization cannot
understand the full range of customer perceptions based on negative feedback alone. A
system for gathering customer perceptions should present a balanced picture of where the
organization stands, which does not happen when customer complaints are isolated from
other aspects of customer relations. That being said, customer complaints can be an
effective part of an overall system for gathering data on customer perceptions. The trick
is to pair this method with at least one other, the combination of which will give an
organization a more accurate view of its status in customers minds. Two specific types
of complaints can be especially useful in maintaining an organizations success repeat
complaints (eg. Complaints about the same product, for the same reason or from the same
customer) and complaints that pose significant r isk to the organization.
Analysis of complaint data can identify these phenomena, and management can
then take appropriate action on the underlying issues. In these cases, the complaint
system becomes a critical survival barometer for the organization. When complaints are
not promptly resolved, frustrated customers seek redress in different agencies or at
different parts or levels of the same agency, resulting in duplicate effort and
compounding costs. There are costs associated with a poor complaint system and there
are benefits associated with a good one. Studies have shown that handling
customer complaints well can be a critical part of a turn around strategy. If a
complaint is handled well, it sustains and strengthens customer loyalty and the
companys image as a leader. It also tells the customer that the company
cares and can improve because of their contact. In government agencies, it
promotes public confidence in government services. Customer complaints strategies also
represent valuable information about recurrent problems. They can point the way to
understanding the root causes of customer problems.
Promotional procedure of NALCO, India :
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Basically NALCO is not spending its money in Various Advertising & promotional
activities, rather it spends money for the development of people as well as the
development of society.
Corpotate social responsibility of NALCO,India :
At Nalco, when we started our activities in Orissa 30 years ago, there was no such
nomenclature like Corporate Social Responsibility or CSR. All that we knew was our
Moral Responsibility towards the society.
But today, CSR has become a buzzword in the corporate world. More and more
organizations are waking up to this belated realization that beyond productivity and
profitability, it is the social accountability that determines their image.
Presently, even before the land is acquired and foundation-stone laid for a project, the
company launches its CSR activities in the area. It is presumed that on a solid CSR
foundation, a strong business empire can be built.
As a policy, Nalco has been allocating 1% of its net profit of the year for periphery
development activities of the succeeding year
Out of this allocable fund:
40% is for Damanjodi sector, where the companys Mines & Refinery are located;
40% is for An gul sector, where the companys Smelter & Power Plant are located;
and 20% is for other areas.
Mobile medical units of Nalco visit peripheral villages in Angul and Damanjodi sectors
and hold health camps round the year, distributing free medicines.
To foster scientific temper among rural students, Nalco takes them to Bhubaneswar and
shows them Pathani Samant Planetarium, Regional Museum of Natural History and
Regional Science Centre
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Soon after the Super Cyclone in Orissa in the year 1999, Nalco has constructed 197
Primary Schools-cum-Cyclone Shelters, under Prime Minister's National Relief Fund
Scheme.
1999: To National Defence Fund during Kargil War Rs.1.18 Cr
1999 For the victims of Super Cyclone in Orissa Rs.1.39 Cr
2001: To PM's National Relief Fund for the victims of Gujarat Earthquake Rs.1.70 Cr
2004: To Sports Authority of India towards training of Indian Contingent for Athens
Olympics Rs.1.00 Cr
2005: To PM's National Relief Fund for the victims of Tsunami Rs.2.44 Cr
2005: To PM's National Relief Fund for the victims of J&K Earthquake Rs.2.98 Cr
2008: To Chief Minister Relief Fund for the victims of Flood in Orissa Rs.5.00 Cr
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SUGGESTIONS
No body in this world is perfect. Every body needs a feedback/suggestion for their
development.
NALCO is not an exception. So, in spite of many good things there are still areas where
Nalco could improve more. Like as a public sector its decision making process is a bit
slow. Here the organization should think to make it faster to compete with the
competitors especially from private sectors. Coal and electricity one of the must needed
resources for the organization. As coal is a natural resources and now a days its amount is
decreasing so, company should think about alternatives.where as NALCO has been
already allocated Utkal-E coal blog,Orissa,for its expansion unit. Even the project was
allocated but still it not work properly.if NALCO will work in this project as soon as
possible it would have an extera advantage to the company and company may add
another new product.
Regarding electricity NALCO has signed a MOU with NTCIL (Nuclear Power
Corporation of India) for setting of Nuclear power plant in India. In joint venture for
generating and selling electric power, If this project will exercise in time then NALCO
can play a pivotal role in the power market.
NALCOs market share it has good position in its primary segment but it should modify
its product mix which will help itself to gain a good position other than primary product
segment. As NALCO is a quite old organization, it needs some technological
improvement also.
As NALCO is a cash reserve organization so the company has the opportunity to expand
its business in different segments. As now the global economic recession has affected
world business very deeply. So, the company should be always prepared to face such
kind of satiation in future.
In our report we have seen almost all of the NALCOs products are in cash cow segment,
accept T-ingots, here company has some areas of improvement and they should be
observed keenly.
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CONCLUSION
Jules Verne, the father of modern science fiction, wrote "From Earth to the Moon",
describing a manned trip to the moon over 100 years before the Apollo landings. The
protagonists' space craft is to be fired from a giant gun and they decide there is one
material which is ideally suited to the application - aluminium: "This valuable metal
possesses the whiteness of silver, the indestructibility of gold, the tenacity of iron, the
fusibility of copper, the lightness of glass.
It is easily wrought, is very widely distributed, forming the base of most of the rocks, is
three times lighter than iron, and seems to have been created for the express purpose of
furnishing us with the material for our projectile."
Aluminium industry in general and NALCO in particular have very bright future. It is
quite sure that NALCO will prove its worth and cement a good position for itself in near
future. Proper identifications of new business opportunity in the international market can
help it gain its market share. It has already taken the required measures for this purpose.
All its expansion program are the vital examples of achieving its goal of securing a good
status at the international level.
Hence the strategy part of Nalco will defiantly play a vital role in its goal achievingprocess. So, we hope this project will help full in order to increase its reputation as well
as also to fulfill the demands of the customers.
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16.0.BIBLOGRAPHY
Marketing Management Arun Sharma
Annual report of NALCO (Month, Year). Publisher.
Parichaya
www.google.co.in
www.netmba.com
www.wikipedia.com
www.nalcoindia.com
www.moneycontrol.com
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