Videocon: Going Global

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Excerpts

Videocon manufactured Color TVs, Black & White TVs and Audio products. At its modern plants at Chitegaon and Aurangabad, the company also manufactured critical components such as Electronic Tuners, FBTs (fly back transformers), ATDMs (Asynchronous Time-Division Multiplexer) and Deflection Yokes...

Nandlal Madhavlal Dhoot, the founder of the Videocon Group, was a sugarcane and cotton cultivator. He boldly embarked upon an entrepreneurial venture by importing machinery from Europe to set up the Gangapur Sakhar Karkhana (Sugar Mill) in 1955...

In the early 2000s, global electronics majors were increasingly outsourcing the manufacture of their products and components. So countries with low-cost manufacturing capabilities like China, India and some Eastern European nations were looking seriously at this opportunity...

Videocon entered oil exploration because with rising prices, oil was becoming a big money spinner. In those pre-NELP (National Exploration and Licensing Policy) days in the hydrocarbon sector, Videocon got two blocks for $46 million (Rs 147.2 crore then), Ravva in the Krishna Godavari basin and another one, KS-OS6. Videocon had a 25 % stake in Ravva (Cairn Energy had 22.5 %, ONGC, 40 % and Marubeni Oil, 12.5 %), which produced 50,000 barrels of oil a day that was sold to domestic companies...

The new business environment, the growing power of the Korean chaebols in the global branded durables market and Videocon's own eroding market share at home prompted Videocon to take the OEM route in order to become a true global player...

Was Videocon building too much capacity in a product that might soon be overtaken by new technology? Conventional CTVs accounted for the majority of sales, even in the West. That was the market Videocon's products would ultimately be selling in...

Exhibit 1: Top Colour Picture Tube Makers in the World
Exhibit 2: Growth Path and Challenges
Exhibit 3: Videocon's Sales before and after Acquisitions
Exhibit 4: Videocon's New Structure
Exhibit 5: Videocon's Manufacturing Footprint across the Globe

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