Adani group
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1. Adani Group pursues a related diversification strategy by entering businesses that are related to its core areas of commodities trading, ports and logistics, and energy generation. 2. This allows it to leverage synergies across businesses and create an integrated value chain. For example, developing ports helped import coal for its power plants. 3. The group may consider expanding into oil and gas exploration to further diversify its energy portfolio. However, entering unrelated areas like retail or steel may not align with its strategic focus on resources, logistics and energy. 4
Adani group
- 1. Presented by: Swarupananda Deogharia Jyoti Bhagchandani Abhijeet Sharma Krishna Mourya Urvi Parekh Amit Gala
- 2. Adani Group is Gujarat based Indian conglomerate company headquartered in Ahmedabad, Gujarat, India It was founded by Gautam Adani, in the year 1988. The core businesses of the group are commodities trading, edible oil manufacturing, Mundra port operations and distribution of natural gas Apart from its core businesses, the Adani Group has also diversified into Real Estate, Ports, Special Economic Zones and IT enabled services
- 4. Resources Logistics Energy
- 5. Coal Trading Business of Adani Trading activities Adani Global Pte Ltd. Enterprises Ltd of Adani Singapore (100%) Enterprises Ltd Power Trading Business of Adani Adani Global Enterprises Ltd FZE,Dubai(100%) Adani Mining Pvt Ltd Coal Mining (100 %) Adani Power Ltd (70.25 Power Generation %) City Gas Distribution Adani Gas Ltd (100 %) Oil and Gas Adani Welspun Projects of Adani Exploration Exploration Ltd (65 %) Enterprises Ltd Adani Infrastructure and Mundra Port and Developers Pvt Ltd SEZ Ltd (MPSEZ) (95%) Edible Oil Refining Adani Wilmar Ltd (50%) Adani Agri Logistics Ltd Grain Silos (100%) Controlled Adani Agri Fresh Ltd Atmospheric (100%) Storage Facility
- 6. Resources comprises coal mines and trading, and will include oil and gas in future; Logistics denotes a large network of ports, SEZs and multi-modal logistics, railways Energy involves power generation and transmission and gas distribution.
- 7. Starting with the plastic polymer import, it gained a foothold in the commodities trading business .This large scale trading business provided Adani Exports with Ability to aggregate demand Access large Capital Well-oiled distribution mechanism Knowledge of international business Possible Political connections Experience in supply chain management
- 8. Market capitalisation (in $ million) 16441 18000 16000 14000 12000 10000 5210 8000 3694 6000 1303 4000 2000 0 2008 2009 2010 2011 Power capacity (in MW) 20000 20000 18000 16000 14000 12000 10000 8000 3960 6000 660 4000 2000 0 2010 2011 2020
- 9. Coal imported (in million MT) 35 31.48 28.76 30 25 22.25 20 10.99 15 10 5 0 2008 2009 2010 2011 Coal mined (in million MT) 3 2.52 2.32 2.5 2 1.5 1.22 1 0.64 0.5 0 2008 2009 2010 2011
- 10. Strength Opportunity: •The diversified nature of the Adani Group • Can diversify into Hydro-electric helps in the growth of Adani Power power generation. • significant opportunity for Adani Power •Strong Project - Execution record to expand its operations and compete with other contenders •Since the largest supplier of coal is Adani • Opportunity to establish presence in Enterprises, this reduces the cost of coal to other parts of the country Adani Power Threat Weakness Present only in very few states namely • Changes in International prices of coal. Gujarat, Maharashtra and Haryana. Changes in International policies regarding import of coal. Facing delay problem in security clearances from GOVT in different ports
- 11. Adani Enterprises Ltd Mar 05, 2012: Adani Enterprises To Supply Coal To NTPC's Power Stations Jan 19, 2012: Aries Completes Design, Supervision And Commissioning Services On Solar PV Power Plant In Gujarat, India Dec 26, 2011: Adani Enterprises Announces Tenders For Selection Of LSP For Transportation And Delivery Of Coal From Mahaguj Collieries Aug 10, 2011: Adani Enterprises Reports Net Sales Of INR95.96 Billion In Fiscal 2011 Jan 25, 2011: Adani Group Signs MoU To Explore Possibility Of Lignite Based Power Plant In Indonesia
- 12. Adani Foundation Mundra Tiroda Ahmedabad Dahej Shimla Rural Development Rural Adani DAV Rural Health and Development public school Development Sanitation Education and Adani Vidya Education medical grants Mandir Community Health Sustainable Livelihood Rural Infrastructure Development
- 13. Competitive strategy Corporate strategy how a firm competes within a particular where a firm competes is the overall plan market concerned with the use of for a multi-business unit company. resources and capabilities to create company adds value through the competitive advantages configuration and organization of its multi-market activities What business the •Cost leadership corporation should •Differentiation be in •Focused differentiation How the corporate Or office should Focused on Niche manage the array of Market business units
- 14. An advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition.. ability to produce ability to sell its generate a larger cost advantage good or service at good or service at margin on sales a lower cost a lower price A differential advantage is created when a firm's products or services differ from its competitors and are seen as better than a competitor's products by customers. “Providing something unique that is valuable to the buyer beyond simply offering a low price .” (M. Porter) THE KEY IS TO CREATE VALUE FOR THE CUSTOMER
- 16. Mundra Tiroda Kawai Adani Power Maharastra (APL) is implementing Limited (APML) is Adani Power Rajashthan 4620 MW Power Plant implementing 3300 MW Limited (APRL) is Phase -1 : 2 x 330 MW Power Plant. implementing 1320 MW Phase - 2 : 2 x 330MW Phase -1 : 2 x 660 MW Power Plant. Phase - 3 : 2 x 660 MW Phase -2 : 3 x 660 MW Phase-1 :2 x 660 MW Phase - 4 : 3 x 660 MW
- 17. Mundra - Dehgam transmission line of 430 Kms, which is the longest dedicated transmission line by private sector. This will be the first HVDC transmission line by private sector in the country. APL is also setting up another 1000 Kms 500 KV HVDC transmission system for supply of power to HPGCL. 50km 400kV Mohindergarh-Bhiwani transmission line for supply of power to HPGCL. Adani Power Maharashtra Limited (APML), a subsidiary of APL, is developing a 221km 400kV Tiroda-Warora Transmission Line
- 18. 2640 MW Coal based Thermal Power Project at Dahej, Gujarat through its subsidiary company Adani Power Dahej Limited. 1320 MW Coal based Thermal Power Project at Chhindwara, Madhya Pradesh through its subsidiary company Adani Pench Power Limited 3300 MW Coal based Termal Power Project at Bhadreshwar, Gujarat through its subsidiary company Kutchh Power Generation Limited 100 MW Solar Power Project at Surendranagar, Gujarat through its subsidiary company Adani Renewable Energy LLP
- 19. Strengths Weakness • Strong execution track record on • delays in coal supplies from Adani the back of the huge success of Enterprises as it is Adani Power’s Mundra Port holding company • The diversified nature of the Adani Group • Other private owned companies are •Great distribution channel of raw also in power generation material handling system •Coal mine resources Opportunities Threats • Adani group’s presence in domestic • The rising Maoist insurgency coal mining will reduce coal cost as could result in delays and higher costs currently Adani Enterprises is the biggest supplier of coal to Adani Power Increase in private sector power generation
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- 21. THREATS OF NEW ENTRANTS LOW High capital investment Resource scarcity BUYERS BARGAINING regulatory approvals BARGAINING POWEROF POWER SUPPLIERS (LOW) Bargaining power Buyers group is not of supplier is high Rivalry is very less powerful Company has also The major rivals of the Shortage of company are NTPC, Power electricity supply gone for forward Grid Corp, Reliance integration Power, Tata Power, Less numbers of Suppliers can‘t Price of electricity is more suppliers integrate forward or less same in the entire (electricity industry producers) i.e. produce Industry growth is high electricity because Consumers are less of the huge entry price sensitive barriers. Majority of consumers are THREAT OF SUBSTITUTES households sources of renewable energy Hydro and nuclear power producing companies and solar power
- 22. Operational capacity(MW) APL JSWEL FY10 1320 1295 FY11 1980 3140 FY12 6600 3140
- 23. Corporate Strategy is the way a company adds value through the configuration and organization of its multi-market activities The definition has three important aspects: Value Addition - the generation of superior financial performance from multi-market activities that create corporate advantage Configuration - the multi-market scope of the corporation (product/market diversification, geographic focus, and vertical boundaries) Organization - the management of the inter-linkages between businesses and the head office The goal of corporate strategy is to build corporate Advantage so as to earn above normal returns
- 24. A firm is diversified if it is in two or more lines of business Vertical Integration Degree of relatedness between the business units is often determined by comparing their value chains when certain stages of the value chains “fit” each other, we consider such diversification related No or little strategic fit = unrelated Diversification (product lines)
- 25. With the increased export and import, Adani group was facing port infrastructure problems that affected its business negatively. This prompted Adani group to undertake private port development in Mundra.
- 26. Adani group undertook another “related” diversification in SEZ by developing an integrated SEZ in Mundra so that the Mundra port could be utilized to the full capacity. The Adani power plant is located very close to a coal-jetty which lowers the transportation cost of the raw material. Close proximity to the sea ensures water for steam generation and cooling.
- 27. Diversification Port and SEZ Edible Oil Power Generation •Increased export and import • Leverage its own • Availability of cost- • Private port development in distribution network to effective fuel sources Mundra give them a competitive • One of the major • Adani group undertook advantage commodities Adani another “related" group imports is coal • One of the major areas diversification in SEZ where one could get a • The coal imported • The key success factors in through the Mundra port competitive advantage was is being used by Adani setting up a port include – in managing the supply power tie-ups with major chain • Currently, coal powers container lines • Transportation accounted more than half of India’s a balanced import and for about 70% of the total electricity plants export cargo mix supply chain cost • Adani Power had twin • Consumption patterns of aims– • The Mundra port adopted exploit growth potential various edible oils differ modern cargo handling in the power sector from region to region facilities which are more satisfy the energy needs operationally efficient of Mundra SEZ.
- 28. Reasons For Diversification Edible Oil: Ports Adani Energy Huge market Indian ports(Kandla and cost-effective fuel sources potential, AWL has more Mumbai ports )were throughout the lifetime of than 45% of market share getting congested which in the project turn affected exports and India the largest importer imports through Adani The coal imported through of edible oils in the world Exports. the Mundra port is being more than 4 mn tonnes. used by Adani power. State government came Currently, coal powers more A growing up with a policy on port than half of India’s population, increasing privatization in 1995 electricity plants rate of consumption . increase the demand for To facilitate trading to The power plant is located edible oil. make smooth and well very close to a coal-jetty integrated supply chain which lowers Generation Power the Transportation accounted transportation cost of the for 70% of total supply Providing strategic raw material. chain cost. competitive advantage • Av over competitors in Close proximity to the sea related businesses will ensure water for steam generation and cooling
- 29. What businesses that we are not in, but should be in? What businesses that we are in, but should not be in?
- 30. ADANI OIL & GAS EXPLORATION ADANI RETAIL ADANI STEEL ADANI REAL ESTATE