Moser Baer: Growth through Diversification
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Case Code: BSTR283 Case Length: 14 Pages Period: 1986-2008 Pub Date: 2008 Teaching Note: Not Available |
Price: Rs.300 Organization: Moser Baer Industry: Consumer Electronics Countries: India Themes: Diversification |
Abstract Case Intro 1 Case Intro 2 Excerpts
"...when you arrive at a crossroads, you have to take a calculated risk to turn in the right direction."
- Deepak Puri, Managing Director, Moser Baer India Ltd., in May 2007.
"They keep on attempting to improve themselves. When their products start maturing or declining, they are ready with the next one. When the floppies went out, they moved onto CDs, and when CDs were in the mature phase, they moved onto DVDs, which are now in the growth phase. When the DVDs go into the next phase of maturity, they will be ready with the next product."
- Raghavendra Rao, Analyst, Frost & Sullivan.
Introduction
In February 2008, Moser Baer India (Moser Baer), a New Delhi-based storage media company, reported a net loss of Rs 204.5 million for the third quarter of 2007-08, against a net profit of Rs 376.2 million for the corresponding period of the previous financial year. Reports indicated that falling margins in the optical storage media business were responsible for the company slipping into the red. Moser Baer was founded by Deepak Puri (Puri) in 1983 as a provider of time-keeping solutions in a joint venture with Moser-Baer AG of Switzerland. The venture did not succeed due to labor problems.
In 1986, Puri retained the Moser Baer name when he ventured into manufacturing floppy disks. Right from its initial days, the company concentrated on maintaining high quality standards at the lowest cost. However, its long-term success was due to its ability to keep up with changes in storage media technology. Although the company was a little late in entering the CD-R market, it managed to quickly expand its CD-R production capacity by the late 1990s. As for DVDs, the company had installed capacity to manufacture millions of these disks even before the demand for them started to increase.
By 2007, Moser Baer had become the world's second largest manufacturer of optical storage media (CDs and DVDs), after CMC Magnetics Corporation. The company exported its products to over 82 countries, servicing these markets through six marketing offices in India, the United States, and Europe. It exported 85 percent of its output and had a 60 percent share of the Indian market. Meanwhile, the company also entered new businesses. In 2005, Moser Baer entered the solar energy business and created a subsidiary Moser Baer PhotoVoltaic Ltd. (MBPV). In 2006, MBPV made a strategic minority investment9 in Stion Corporation (Stion). Stion, formerly known as NStructures, was a nanostructures technology company based in California...
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