BPL Ltd & Sanyo Electric Co. Ltd: An Enduring Alliance

 
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Case Details:

Case Code : BSTR223
Case Length : 21 Pages
Period : 1982-2006
Organization : Sanyo BPL Pvt. Ltd., BPL Ltd, Sanyo Electric Co. Ltd.
Pub Date : 2006
Teaching Note :Not Available
Countries : India, Japan
Industry : Consumer Electronics

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"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." 1

- 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." 2

- 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,"3 said T.P.G. Nambiar, founder of the BPL group.

The new JV Company was to manufacture and market all types of televisions - CRT,4 LCD,5 and plasma.6 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.

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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.

BPL Ltd & Sanyo Electric Co. Ltd: An Enduring Alliance - Next Page>>


1] "Sanyo BPL announces three-year plan for India," www.indiantelevision.com, January 31, 2006.

2] "Sanyo-BPL joint venture takes off," www.sify.com/finance, January 26, 2006.

3] "BPL signs a strategic partnership with Sanyo," www.bplworld.com, July 27, 2004.

4] The CRT or the Cathode Ray Tube, invented by Karl Ferdinand Braun, is a display device used in televisions, computer displays, radar displays, video monitors, etc. It was the only such display device available until the late twentieth century. The popularity of CRTs is primarily due to their affordability.

5] An LCD or Liquid Crystal Display is a thin, flat display device made up of many color/monochrome pixels arranged in front of a light source or reflector. It is energy efficient and light weight. Initially, LCDs suffered from technical problems - fast moving images were hazy, images were distorted when viewed from an angle and the size of LCD televisions was limited. However, the latest LCD televisions have largely overcome these drawbacks.

6] The Plasma display, invented at the University of Illinois (Urbana-Champaign) by Donald L. Bitzer and H.Gene Slottow, is an emissive flat panel display where light is created by phosphors excited by a plasma (ionized gas) discharge between two flat panels of glass. Plasma displays are bright, have a wide color gamut, and can be produced in fairly large sizes (up to 102 inches). (Source: www.wikipedia.com).

 

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