Abstract

Bajaj Electricals Limited (BEL) had been in the business of manufacturing and marketing consumer electronics and luminaries, engineering, and projects for over 70 years since 1938. A sudden downturn in the economy as well as in its business in 2001, caused stiff competition across its product lines and led to both its profits and its turnover plummeting. The company undertook a 360 degree revamping exercise and put in place a number of strategic, operational, distributional, and marketing initiatives to turn around the company and placed it back on the path to growth and profits. It reorganized its existing organizational structure and completely revamped the supply and distribution chains to suit the prevailing industry norms and competitive market conditions. BEL also simultaneously initiated a financial restructuring exercise along with other cost cutting measures. It introduced innovative pricing and marketing strategies and either exited or took a relook at unviable businesses and product lines. Analysts attributed the turnaround of the company in 2003 and its subsequent high growth trajectory to these measures.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the challenges and issues involved in identifying the need for change in an organization and initiating the change at the right time and with the right processes.
• Analyze the importance of strategic and operational initiatives in turning around an organization.
• Understand the difference in measures affecting top line versus measures affecting the bottom line of a company.
• Identify and evaluate the pros and cons of exiting a line of business to concentrate on core areas of business for an organization.
• Understand the importance of a pricing strategy and micro segmentation as a market strategy to achieve growth across product segments.

Keywords

Strategy, Business transformation, Turnaround, Organizational structure, Matrix structure, Restructuring, Strategic Business Units, Sourcing, Distribution, Cost management, Customer satisfaction, 'Mission Excell', Market Potential Value (MPV) Index, RK Swamy BBDO Guide to Urban Markets, Brand leveraging, Bajaj Electricals Limited