Abstract

This case is about the growing demand for ACs in India, and how Voltas was trying to tap the opportunities presented by the market. Voltas was recognized as the key market player in the AC segment in India for the consecutive financial years of 2013-14 and 2014-15 with a whopping market share of 19.8% and 20.8% respectively. It surpassed the competitors in the AC segment by incorporating standardized production practices and indigenous energy efficient technology. The company’s introduction of an ‘All weather AC’ featuring advanced technology revolutionized the AC business across the country. The company’s commitment to the achievement of the twin objectives of product differentiation and customer satisfaction contributed to its successful business.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the market penetration of ACs in India.
• Assess the opportunities for AC companies in India.
• Understand how Voltas became the AC market leader in India.
• Understand the AC market dynamics in India.
• Nature of the AC market in India — three firm concentrations, Herfindahl-Hirschman Index.

Keywords

Demand pattern, Price Elasticity of Demand, Income Elasticity of Demand, Factors influencing demand, Firm concentration, Herfindahl-Hirschman Index, Market penetration, Market dynamics, Managerial economics