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    Ingersoll Rand Air Compressor India

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    Bhabani Shankar Lenka
    Ingersoll Rand (IRL) faces challenges in its air compressor business in India, as the market becomes commoditized and price-focused. IRL must decide whether to lower prices and compromise profits, or develop a new strategy. IRL currently sells various air compressors, but faces stiff competition and high buyer bargaining power. It is stronger than competitors in reputation and technology, but also prices higher. The document analyzes IRL's business goals, stakeholders, and recommends a solution-focused "cost of use" approach, becoming more involved in customers' processes to improve performance and maintain profitability.

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    Ingersoll Rand Air Compressor India

    Uploaded by

    Bhabani Shankar Lenka
    232 views11 pages
    Ingersoll Rand (IRL) faces challenges in its air compressor business in India, as the market becomes commoditized and price-focused. IRL must decide whether to lower prices and compromise profits, or develop a new strategy. IRL currently sells various air compressors, but faces stiff competition and high buyer bargaining power. It is stronger than competitors in reputation and technology, but also prices higher. The document analyzes IRL's business goals, stakeholders, and recommends a solution-focused "cost of use" approach, becoming more involved in customers' processes to improve performance and maintain profitability.

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    B2B Marketing Case

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    Ingersoll Rand (IRL) faces challenges in its air compressor business in India, as the market becomes commoditized and price-focused. IRL must decide whether to lower prices and compromise profits, or develop a new strategy. IRL currently sells various air compressors, but faces stiff competition and high buyer bargaining power. It is stronger than competitors in reputation and technology, but also prices higher. The document analyzes IRL's business goals, stakeholders, and recommends a solution-focused "cost of use" approach, becoming more involved in customers' processes to improve performance and maintain profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    232 views11 pages

    Ingersoll Rand Air Compressor India

    Uploaded by

    Bhabani Shankar Lenka
    Ingersoll Rand (IRL) faces challenges in its air compressor business in India, as the market becomes commoditized and price-focused. IRL must decide whether to lower prices and compromise profits, or develop a new strategy. IRL currently sells various air compressors, but faces stiff competition and high buyer bargaining power. It is stronger than competitors in reputation and technology, but also prices higher. The document analyzes IRL's business goals, stakeholders, and recommends a solution-focused "cost of use" approach, becoming more involved in customers' processes to improve performance and maintain profitability.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    INGERSOLL RAND (INDIA) LTD

    AIR COMPRESSOR BUSINESS


    AT CROSS ROADS
    INGERSOLL RAND : COMPANY
    BACKGROUND
    Started in Dublin, Ireland in 1871 is a global major in manufacturing of
    industrial equipment.
    Deals mainly in production of air compressors, jackhammers, different
    types of drills, power tools, refrigeration systems and gulf cars.
    Highly diverse product profile with 4 different market segments: security &
    safety, infrastructure, industrial productivity & climate control.
    Established in India in 1921. Went public by 1977. Operates 2 plants in
    Bangalore & Ahmedabad.
    Current revenue is of 15 billion USD & more than 50000 employees and
    operates world-wide.

    PROBLEM STATEMENT
    How Ingersoll Rand would react to the current
    market scenario where the commoditization of Air
    Compressor seems imminent, should it jump into the
    price war and forget about the bottom line or should
    it try to build a new strategy where it can grow its
    business and not compromise on profitability.

    AIR COMPRESSOR BUSINESS OF IRL
    Amounts for 25% of total revenue in India.
    3 types of air compressors Small, medium and large reciprocating.
    Company sells large air compressors directly to clients via its own
    sales team.
    Small & medium are sold through distributors too.
    Majorly used in heavy industries and complex process oriented
    industries like pharma, steel & cement.
    IRL has all variants of Air compressors from 4 CFM to 100 CFM
    without any product gap.

    Competitors
    Stiff competition.
    Competitors are
    collaborating.
    Gladiator
    syndrome.

    New entrants
    Entry barriers
    are huge due
    to high R&D
    needed and
    huge capex.
    Substitute
    No substitute
    available
    currently
    Supplier
    No issues
    except for
    imported
    components
    for which
    custom is
    charged.
    Buyers
    Bargaining
    power is high.
    Buyers are
    not growing
    as well.
    PORTERS 5 FORCE ANALYSIS OF IRLS AIR COMPRESSOR
    BUSINESS
    Strength
    Years of
    reputation as a
    quality leader.
    Modern
    technology, no
    product gap,
    skilled workforce
    and R&D
    capability.
    Weakness
    Comparatively
    priced higher.
    Losing market
    to unorganized
    sector.
    Opportunity
    Become solution
    oriented.
    Stop importing
    from USA to
    reduce cost.
    Outsourcing.
    Threat
    Economic slow
    down and buyers
    negotiation powers
    are growing.
    Competitors are
    collaborating with
    foreign giants.
    SWOT ANALYSIS OF IRLS AIR COMPRESSOR
    BUSINESS
    BUSINESS GOALS OF DECCAN TEXTILES
    MD
    Sales needs to be boosted to get more revenue.
    Improvement of operational efficiency.
    VP
    (Manufacturing)
    Reduction of cost of production.
    New technology to improve efficiency & quality.
    Maintenance
    Head
    Air compressor performance needs to improve.
    Losses due to maintenance amounting to 120 lacs per annum
    must be taken care of.
    STAKEHOLDER ANALYSIS OF DECCAN
    TEXTILES
    THE WAY FORWARD
    1.More control
    over customers
    business
    2.More cost
    saving for client
    3.Long term
    relationship and
    more reorders.
    4.Customer will
    not negotiate on
    price and
    profitability will
    be maintained.
    Benefits
    1.Solution
    providing firm
    2.Cost of use
    approach
    3. An in depth
    analysis of
    customer needs
    and
    involvement in
    related process.
    4.Along with it
    focus should be
    on value
    creation.
    Desired
    1.Product
    making firm
    2.Cost of buy
    approach
    3.No
    involvement in
    Clients
    business
    process and
    needs.
    4.Focus on
    quality and
    innovation.

    Current
    DECCAN TEXTILE DEAL
    IRL should close the sale and use this as a pilot project for the new
    strategy for their air compressor business.
    The purchase team of Deccan must be convinced that their tactics of
    paying less and getting more is not so effective and how IRLs air
    compressor is ultimately cot them less in cost-to-use approach.
    They need to show how the air compressors performance is related in
    achieving the business goals of different departments.
    Total Cost of Ownership (TCO) approach to be followed.
    THANK YOU

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