BPL Ltd & Sanyo Electric Co. Ltd: An Enduring Alliance
|
Case Code: BSTR223 Case Length: 21 Pages Period: 1982-2006 Pub Date: 2006 Teaching Note: Not Available |
Price: Rs.400 Organization: BPL, Sanyo Industry: Consumer Electronics Countries: India, Japan Themes: Mergers, Acquisitions, Strategic Alliances |
Abstract Case Intro 1 Case Intro 2 Excerpts
"We are excited to be in India and are totally committed to growing the Indian market. We are bringing the best on offer from Sanyo, which reflects the importance of this market."
- Keiji Oshima, President & COO, Sanyo BPL Pvt. Ltd., in 2006.
"We have been out of the market for over two years now. We are confident we will regain our market share."
- Ajit G Nambiar (Ajit), Chairman and CEO, Sanyo BPL Pvt. Ltd., in 2006.
Introduction
In July 2004, Sanyo India Private Ltd (Sanyo India), the wholly-owned subsidiary of Sanyo Electric Co. Ltd. (SECL), Japan's third largest consumer electronics company, entered into a 50:50 joint venture with BPL Ltd. (BPLL), the flagship company of the BPL group. The color television (CTV) business of BPLL, including two assembly lines, sales, service, marketing, and distribution infrastructure, was shifted to the new joint venture, and was christened Sanyo BPL Private Ltd. (Sanyo BPL). "We have cemented our close long-term relationship with Sanyo through this agreement," said T.P.G. Nambiar, founder of the BPL group. The new JV Company was to manufacture and market all types of televisions - CRT, LCD, and plasma. However, the JV Company began operations only in the last part of 2005 and made known its intention of entering the Indian CTV market with both the BPL and Sanyo brands.
In early 2006, the JV company officials informed the press that they aimed to capture 17% of the Indian television market in three years. SECL had also decided to sell high-end refrigerators, washing machines, air-conditioners, etc., through Sanyo India, and aimed to gain 18% of the appliance market by fiscal 2009. The joint venture was a new chapter in the shared history of the two entities. During the period of their association, which began in the early 1980s, both BPLL and SECL experienced drastic fluctuations in their fortunes. In the late 1990s and early 2000s, BPLL, with technical assistance from SECL, was the market leader in several categories in the Indian consumer electronics and home appliances market. By 2003, however, BPLL was facing serious financial problems. In 2004-05, owing to intense competition in the global electronics market, SECL too posted record losses and was teetering on the edge of bankruptcy.
BPLL embarked on a debt restructuring exercise under which it retired high cost debt and sold off 'non-core' businesses. SECL too undertook a revival plan and decided to concentrate on emerging markets, eco-friendly products, etc. Although Sanyo BPL would be operating in a market which had witnessed dramatic changes over the previous five years, the partners were optimistic about their future prospects...
Buy this case study (Please select any one of the payment options)
| Price: Rs.400 |
Price: Rs.400 | PayPal (9 USD) |
