BPL Ltd & Sanyo Electric Co. Ltd: An Enduring Alliance
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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
Excerpts
About SECL
SECL began as Sanyo Electric Works in 1947 in Moriguchi, Osaka. Initially, it manufactured bicycle generator lamps. Right from the start, it was known for the quality of its products. In 1950, it changed its name to Sanyo Electric Co. Ltd. In 1952, SECL became the first company to launch plastic radios in Japan. In 1953, the company started manufacturing televisions. It also launched washing machines with the 'pulsator', a revolutionary technology then. In 1954, the company was listed on the Tokyo and Osaka stock exchanges. In 1956, the company launched electric fans and heaters. In 1961, it started manufacturing home-use split air conditioners in Japan, the first company to do so. In 1969, it established two subsidiaries - Sanyo Electric Credit Co. Ltd (SECCL) and Sanyo BC. In 1970, the company established a product development center...
BPLL and SECL: An Enduring Alliance
Technical Collaboration: The relationship between SECL and BPLL began as early as 1982. SECL provided technology to BPLL in diverse product categories. For example, BPLL's alkaline battery business used state-of-the-art technology from Sanyo Energy Tottori Co. Ltd., a subsidiary of SECL. SECL was a major player in the battery business and its batteries had even been approved by NASA, USA, for its space application programs. The batteries manufactured at BPLL's plants were also shipped to SECL. SECL also held stakes in several companies in the BPL group. However, until 2005, it stayed away from assuming management responsibilities in any of the companies. In early 2001, SECL picked up a 14% stake in BPLL's subsidiary in the home appliances business - BS Appliances Ltd. The subsidiary manufactured and marketed appliances like washing machines, microwave ovens, vacuum cleaners, dishwashers, gas tables, and cooking ranges...
Challenges
Sanyo BPL was faced with a competitive environment that was dramatically different from the environment in which BPLL had operated a few years earlier. In the early 2000s, BPLL was the leading company in the Indian consumer durable market and enjoyed credibility and trust of consumers and dealers. Analysts felt that it could prove to be an uphill task for the new company to earn back this trust, especially among dealers. A management consultant with Abacus, D.K. Sabharwal, commented, "Once you vacate the space, it is extremely difficult for the player to return to the same place in one of the fastest growing markets in the world." However, according to research conducted by the company, consumers still perceived the BPL brand to be trustworthy but felt that it had lost its dominant position because it had fallen behind in technology...
Outlook
In March 2006, SECL announced that it would launch several energy-related products in the Indian market through its subsidiary, Sanyo India, both for individual consumers and commercial establishments. It was also considering launching products with new technology, like Aqualoop in washing machines, which would clean the water used for rinsing and reuse it in the washing process. The high technology products were to be sold through 2,500 or so outlets that were to distribute BPL CTVs as well. The number of such outlets was to be increased to around 15,000 in one year. In April 2006, the BPL group too was seriously evaluating its businesses and preparing a road map for the future. The long-drawn-out debt restructuring exercise was successful in reducing the company's debt burden from Rs. 15 billion in March 2003 to Rs. 2.6 billion in March 2006...
Exhibits
Exhibit I: BPL Logo
Exhibit II: About BPL Power Projects Ltd.
Exhibit III: Market Share In The Indian CTV Market - 2001 And 2005
Exhibit IV: BPL Financials
Exhibit V: BPLL's Product Profile In 2005
Exhibit VI: The SANYO Word-Mark
Exhibit VII: The Solar Ark
Exhibit VIII: SANYO's Revival Program
Exhibit IX: SANYO Electric Co.Ltd Financial Information
Exhibit X: Competition in the Indian Consumer Durables Market- 2006
Exhibit XI: SANYO World-Wide Product Profile
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