Presented to:

Hemchandracharya North Gujarat University, Patan

Presented by:
Sachin Nandha (341)
Darshan Shah (348)
Disha Shah (349)
Mrunal Vaza (358)
Shruti Velani (359)
• “SUZLON” the name is enough for introduction.
• It had been started by Mr. Tulsi Tanti in the year 1995 as
“suzlon fibres.”
• Suzlon is a big player in wind energy generation.
• It is at 5th position in the world for manufacturing wind
turbines.
•Flexible organization structure.
“E & Y award – ‘The Entrepreneur of the Year’
CNBC TV18 – ‘Business Leader of the Year’ award
Venture Intelligence – ‘Best PE backed Company’ award
TERI Alumni Award for Outstanding Entrepreneurship
In energy Environmental Technologies for 2006
Increasing energy demand

Electricity Percent
Year Rank
consumption Change

2003 497,200,0 7
2004 497,200,0 7 0.00%
2005 510,100,0 6 2.59%
2006 519,000,0 6 1.74%
2007 587,900,0 5 13.28%
2008 517,200,0 7 -12.03%
Pollution free
Permanent
Conserves fossil fuel
Improves grid quality and efficiency
Rural development
 Partially
Factors Favorable favorable Unfavorable

Government Policies 
Changes in safety, health
and environmental laws 
Central Government’s
Incentives 
IREDA's Financing Guidelines
for Wind Energy Projects 
Foreign Investment Policy
for Renewable   ( for co.)

Overall political factors are favorable to industry

 Partially
Factors Favorable favorable Unfavorable

Economic growth rate 

Inflation rate 
Interest rate 
Exchange rate and
stability of host
country currency 
Electric consumption 
Overall economical factors are partially favorable to industry
 Partially
Factors Favorable favorable Unfavorable

The technology 
Rotor height &
diameter 

Offshore technology 
Operation &
maintenance 
Overall technological factors are favorable to industry
 Partially
Factors Favorable favorable Unfavorable

Equivalent
savings 
Environment
friendly solution 
Aware the
investors 
Overall environmental factors are favorable to industry
Factors Favorable Partially Unfavorable
favorable

Political 

Economical 
Technological 

Environmental 
 Moderate Moderate
High to high Moderate to low low
Is it difficult or
costly for suzlon to
switch to another
supplier? 
Certain inputs are
in short supply 
High forward
integration cost 
•Overall bargaining power of suppliers is moderate to low.
 Moderate Moderate
High to high Moderate to low low

Switching cost 
The number of buyer is small
& volume is high 
Buyers demand is weak or
sellers are scrambling to
secure the market 
Buyrs are well informed
regarding price, cost and
product 
Hard backward integration 
• High entry barriers
• Unavailability of skilled
labors 
overall the bargaining power of buyers Moderate
 Moderate Moderate
High to high Moderate to low low

Brand preference 
Exit barriers 
Capital requirements 
Access to distri.
Channels 
Regulatory policies 
• Govt. regulations
• Tariff rates and
restrictions 

Overall threat from new entrants is low to moderate.

 Moderate Moderate
High to high Moderate to low low

Oligopoly market 

Differentiation 

FDI limits 
Rivalry using price
cuts 
•over all the rivalry is moderate to high in this industry.
 Moderate Moderate
High to high Moderate to low low

Wether the substitutes are

readily available? 
Cost of substitutes to end
users 
Comaparatively high
investment in wind energy 

•Overall threat from substitute is high.

Strength

•Differentiation
•Promotion of after sale services
•Market leader since 9 years
•Promotion by highlighting big customers
•Celebrity endorsement
•Awareness campaign
Strengths
•Employee turnover ratio is very less (6% as of 11% of industry).
•And the company is having no union except vankusawade.
• Cost advantage
Source: Annual Report

RE
% Suzlon Vestas Gamesa Nordex Power
Employees cost/ sales 3 20 12 16 9

Othe mfg. & selling

exp./ sales 74 78 67 95 92
Weakness

While evaluating the performance, company doesn’t

consider the external factors affecting the
performance, so if employees have tried but due to
external factors if he can’t perform, he won’t be
evaluated nicely.
Strength:

•Suzlon has better potential to cover its short term debts in case of
emergency. It has higher margin of safety. The increase in secured
and unsecured loans aggregating approximately Rs 4,711 crore was
primarily on account of loans of Rs 2,749 crore taken in connection
with acquisitions of Hansen and RE power. Even though its interest
coverage ratio is 12.53 which is very good.

• Suzlon has better Interest Coverage Ratio. So it is not burdened by

debt and can avail some more loan to finance its operating or
investing activities. It has also • Redemption of preference shares of
Rs 15 crore.

• The company has managed to Increase its PAT even after

Acquisition of RE Power & Hansen. It had pat as a percentage of
sales is 20% in year 2006-07 and in year 2007-08 it has 18% PAT. So
after equitation of two big giants it had well managed its profitability.
Du pont model
weakness

•Working capital improper-management

•FCCB problem

Suzlon Energy Alstom Power

2007-08 2006-07 2005-06 2007-08 2006-07 2005-06

Currant ratio 3.37 2.98 2.33 0.81 0.74 0.75

Liquid ratio 2.46 2.10 1.63 0.68 0.62 0.62

Absolute current 1.14 0.84 0.69 0.47 0.42 0.43

ratio

Inventory Days 155.29 176.64 158.15 55.76 49.02 55.46

Debtors Days 131.54 149.86 127.20 74.14 62.34 67.58

Creditors Days 115.49 108.32 118.06 91.53 96.05 100.04

W.Cap Days 171.34 218.18 167.29 38.38 15.31 22.99

Strength
Suzlon is totally vertically integrated company, so it doesn’t have to rely so much
on suppliers. The company is having iits presence in almost all the sections
where the product is critical for the company and without it is not possible for
company to do set up.

Production process of suzlon is standard according to industry and it is using

resources carefully.

Its production is efficient so that it can produce wind energy at competitive rates,
so its having competitive advantage over domestic rivals in terms of cost
efficiency.

Suzlon’s cost advantage: Source: Annual Report

Games
% Suzlon Vestas a Nordex RE Power

Employees cost/ sales 3 20 12 16 9

Othe mfg. & selling exp./

sales 74 78 67 95 92

EBIT margins 23 2 21 -12 -1

Weakness
Inventory level is too high.
2007-08 2006-07 2005-06

Currant ratio 3.37 2.98 2.33

Liquid ratio 2.46 2.10 1.63
Absolute current ratio 1.14 0.84 0.69
Inventory Days 155.29 176.64 158.15
Debtors Days 131.54 149.86 127.20
Creditors Days 115.49 108.32 118.06
W.Cap Days 171.34 218.18 167.29

Problem of blade rectification

Strengths

•They acquire companies in countries like China, Denmark,

Germany which are technologically developed in this sector, so
they can have the benefit of their R&D departments.
•In-house development expertise in key components.
•Recognised technological leadership in gearbox through
Hansen.
•Developed own MW and multi MW WTG models and rotor
blades.
•Development of a vibration sensing system in all upgraded
blades
•In-built sensor to auto shutdown the turbine in the event of a
blade crack being discovered over the next 20 years
Weakness

•R&D department is lacking at domestic level, though it is

having skilled employees.
•As they not doing R&D in India in full fledge and they are
depended on their subsidiaries and due that they have to
face technology transfer problem, taxes and cost related
to it.
 30 Vestas
NEG
Industry Growth Rate

Suzlon Enercon

NEPC
15
Others

2 1 0

Relative market share

 10

High
Suzlon
Industry Attractiveness

6. Enercon NEPC
7

Moderat
e

3.3

Low

10
High 6.7 Moderate 3.3 Low 0

Business strength
 Strat egy
Improving cost

efficiency
Growth
acceleration
Focus on high
growth market
Vertical
integration
Strategic focus on
customer needs
End to End
solution
SU ZLO N
QSPM
(Quantitative strategic
planning matrix)
Model
 Stategic alternatives

Key internal factors Weight Vertical Integration R&D Global expansion

Strengths AS TAS AS TAS AS TAS
Integrated business model 0.09 3 0.27 3 0.27 3 0.27

In-house Technology and Design Capabilities 0.09 3 0.27 4 0.36 2.5 0.225

Market leadership in India and Global presence 0.08 2 0.16

Prudent acquisitions and alliances 0.08 4 0.32 4 0.32 4 0.32
Global Production 0.06 2 0.12 2 0.12 3 0.18
Pricing Power 0.05 2 0.1 2 0.1
Diversified Product Line 0.05 1 0.05 3 0.15 3 0.15
Weakness
Operational risk 0.08 3 0.24 2 0.16 3 0.24

Growth in Assets overweighing Growth in Profits 0.1 2 0.2 3 0.3

Stock price 0.06
Ratings 0.08 2 0.16 3 0.24

Improper working capital management 0.1 3 0.3 4 0.4

Weak Strategic financial management 0.08 3 0.24 2 0.16 3 0.24
Sub total 1 2.11 1.8 2.725
Key external factors
Opportunities
Environmental awareness 0.1 3 0.3
Government initiatives 0.1
Untapped Offshore market 0.11 2 0.22 2 0.22 3 0.33
Steady source of demand 0.09 2 0.18
Vast coast lines of India and low cost 0.12

Threats
Intense competition 0.12 2 0.24 3 0.36 3 0.36
Foreign exchange risk 0.12 2 0.24 2 0.24 3 0.36
Technology risk 0.14 2 0.28 3 0.42 3 0.42
Objections to Wind Power 0.1 1 0.1
Sub total 1 0.98 1.24 2.05
sum total attactiveness score 3.09 3.04 4.775
•SKILL AMALGAMATION
•END TO END SOLUTION
•VERTICAL INTEGRATION AND ACQUISITION
•INTEGRATED MANUFACTURING CAPABILITIES
•BRAND IMAGE
 PRODUCT LIFE CYCLE(MW)

30000

25000 26000

20000 19791
IN (MW)

15000 15016 energy(MW)

11542
10000
8154
5000

0
2004 2005 2006 2007 2008
YEAR
 ADL Matrix
Industry Maturity

Embryonic Growth Mature Aging

Dominant NR NR NR NR

Strong NR Increase market NR NR

share with
expansion
Competitive Favorabl NR NR NR NR
Position e
Tenable NR
NR NR NR

Weak NR NR NR NR
SWOT to TOWS
 Strengths Weakness
•Integrated business model •Operational risk
•In-house technology and •Growth in Assets
design capabilities overweighing Growth in
T •Market leadership in India Profits
and global presence •Stock price
O •Prudent acquisitions and •Ratings
Alliances •Improper working capital
W •Global Production management
•Pricing Power •Weak Strategic financial
S •Diversified Product Line management

Opportunities S-O Strategies W-O Strategies

•Environmental awareness
•Government initiatives
•Untapped Offshore market
•Steady source of demand
•Vast coast lines of India and
low cost
•Global expansion •Planned global expansion
•Expansion of diversified product
line
•Focus on global promotion

Threats S-T Strategies W-T Strategies

•Intense competition •Cost consciousness •Proper WC management
•Foreign exchange risk •Technology transfer •Proper asset management
•Technology risk •End to end model at global level
•Objections to Wind Power