2013

Larsen & Toubro Limited

Its all about Imagineering

ByAnurag Pathak-12BSP2012 Sakshi Kapila Ankush Gupta-12BSP0188 Shivani Jain-12BSP1615 Lokesh Kamra-12BSP0615

9/5/2013

COMPANY OVERVIEW
Larsen & Toubro (L&T or "the company") is a technology, engineering, construction, and manufacturing company. Its other key activities include manufacturing of electrical and electronic equipment, services, and information technology. The company operates primarily in India. L&T is headquartered in Mumbai, India and employed about 48,754 people as on 31st March 2012. The company recorded revenues of INR651,420.8 million ($13,588.6 million) during the financial year ended March 2012 (FY2012), an increase of 22.9% over FY2011. The operating profit of the.company was INR69,167.4 million ($1,442.8 million) in FY2012, an increase of 6% over FY2011.The net profit was INR46,936.9 million ($979.1 million) in FY2012, an increase of 5.3% over FY2011.

KEY FACTS

Mission and Vision of L&T Ltd.

VISION

MISSION:
L&T Ltd shall provide products based on efficient and environment-friendly technology, consistently surpassing cutomer expectation of quality and on time delivery. L&T Ltd shall follow fair and transparent practices with all stakeholders and performances excellence by innovation and continuous improvement in people, products and services L&T Ltd power shall foster a culture of care, challenge and empowerment among it employees.

BUSINESS DESCRIPTION
Larsen & Toubro (L&T or "the company") is a technology, engineering, construction, and manufacturing company in India. It is also engaged in manufacturing of electrical and electronic equipment, financial services, and information technology. L&T primarily operates in India and also has international presence in various markets, including China and the Middle East. L&T operates through six business segments: engineering and construction, electrical and electronics, machinery and industrial products, others, financial services, and developmental projects. L&T's engineering and construction segment comprises execution of engineering and construction projects to provide solutions in civil, mechanical, electrical, and instrumentation engineering (on turnkey basis or otherwise) to core sectors including railways, shipbuilding, and supply of complex plant and equipment to core sectors. The segment capabilities include basic/detailed engineering, equipment fabrication/supply, erection and commissioning, procurement/construction, and project management. The segment is sub divided into heavy engineering division (HED) and engineering, construction and contracts division (ECCD). The HED manufactures and supplies custom designed and engineered critical equipment and systems to core-sector industries including fertilizers, refinery, petrochemical, chemical, oil and gas, thermal and nuclear power, aerospace, and equipment and systems for defense applications. It is the preferred supplier of equipment for a select range of products globally. The ECCD undertakes engineering design and construction of infrastructure, buildings, factories, water supply, and metallurgical and material handling projects covering civil, mechanical, electrical and instrumentation engineering disciplines. The electrical and electronics segment comprises manufacture and sale of low and medium voltage switchgear and control gear, custom-built switchboards, electronic energy meters/protection (relays) systems, control and automation products, and medical equipment. The manufacturing operations of this segment are located at Powai, Ahmednagar, Navi Mumbai, Coimbatore, and Mysore in India. Its international manufacturing facilities are located in China (Wuxi), Saudi Arabia, UAE (Jabel Ali, Dubai), Malaysia, Indonesia, and Australia. The machinery and industrial products segment comprises of two distinct business streams: industrial machinery and industrial products. Industrial machinery manufactures and sells machinery to paper and pulp, crushing, mining, mineral processing, steel, and rubber and plastic processing industries. Industrial
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products comprise industrial valves, welding products and cutting tools L&T's others segment includes ready mix concrete, e-engineering services and embedded systems,information technology services and mining. The financial services segment comprises corporate finance, equipment finance, infrastructure financing, mutual fund services and related advisory services. The developmental projects segment comprises development, operation, and maintenance of basic infrastructure projects, toll collection, power development, development of urban infrastructure, and providing related advisory services

MAJOR PRODUCTS AND SERVICES

Larsen & Toubro is a technology, engineering, construction, and manufacturing company. The company is also involved in the manufacturing of electronic and electrical equipment and information technology. Its major products and services include:

Turnkey projects:
Cement and allied machinery Engineering services Hydrocarbon Power Railway project Water

Construction:
Building products Engineering services Infrastructure concessions International projects Specialized services

Engineered products and systems:

Aerospace Cement Coal gasification
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Defense Fertilizers Nuclear power plant Oil and gas Petrochemicals Refinery Thermal power plant

Electrical and electronic products and systems:

Control and automation Electrical systems Medical equipment Metering solutions and relays

Board of Directors

Key Employees

SWOT ANALYSIS
Larsen & Toubro (L&T or 'the company') is a technology, engineering, construction, and manufacturing company. Its other key activities include manufacturing of electrical and electronic equipment, services, and information technology.The company leverages its resources, capabilities, and strong brand name to strengthen its market position. However, increasing steel prices can increase the raw material costs and hamper the profitability of L&T.

Strengths
Market leadership providing competitive edge L&T is a technology, engineering, construction, and manufacturing company. It is one of the largest and most respected companies in India for engineering, manufacture and integration of custom made technology-intensive equipment and systems. The company has manufacturing facilities in India, China, Oman and Saudi Arabia; and has its customers in more than 30 countries. L&T has a strong brand name, having built world's largest coal gasifier made in India and exported to China, the world's biggest ethylene oxide reactor for a petrochemical complex in the Gulf, the world's largest Fluid Catalytic Cracker regenerator for a refinery, and the world's longest limestone conveyor. L&T
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also played a critical role in building India's first nuclear powered submarine. The company can leverage its strong brand name and market leadership position to gain competitive advantage and also expand into international markets. Strong technical expertise reinforce leadership position Technology plays a very important role in all of L&T's operations. In engineering and construction, L&T's technology capabilities include a strategic mix of in-house strengths and the expertise of its joint venture partners. Engineering centers carry out process design and simulation, analysis of computational fluid dynamics, mechanical design, failure analysis, and trouble shooting. L&T has set up an engineering and project management centre in Abu Dhabi to undertake oil and gas related projects as well as engineering and consultancy services. In manufacturing, L&T's design and engineering capabilities enable it to set new benchmarks in terms of scale, sophistication, and speed.The company has engineering centers at the manufacturing locations. L&T's electrical and electronics division is a pioneer in the design of switchgear and switchboards that are engineered for tropical conditions. It has built further on this experience, and has leveraged its research and development strengths to develop a host of new products and features.In technology services, L&T develops optimal solutions for its global clients.The embedded systems unit provides technological assistance across a broad spectrum of operations including design, maintenance, re-engineering, testing, prototyping, and industrial design. A strong technical expertise helps the company to reinforce its leadership position, sustain its competitive strengths, and provides with an edge over its competitors. Diversified revenues providing resilience L&T has an array of businesses in diverse areas. The company is mainly engaged in technology, engineering, construction, and manufacturing. For instance, in FY2011, the companys revenu es were distributed among business divisions as follows: engineering and construction (75.3% of the total revenues during FY2011), electrical and electronics (7.3%), machinery and industrial products (6%), financial services (3.9%), developmental projects (2.1%), and others (5.5%). Diversified product and service offerings enable L&T to alleviate its business risk as fluctuations in a single offering have less impact on diversified offerings and provide resilience to its revenues.

Weaknesses
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Dependence on domestic operations for revenue generation L&T is largely dependent on its domestic operations for generating its revenues. In FY2011, the company's domestic (India) operations contributed more than 80% of the total revenues. The company's revenues can be affected with any adverse events occurring in the domestic market such as adverse economic conditions and foreign currency fluctuations, among others. Higher dependence on domestic operations to generate revenues could drastically affect L&T's revenues and profitability. Increasing debt impacting financial flexibility Larsen & Toubro Limited L&Ts debts are increasing steadily. The companys debts in the form of loans increased to INR328,285.3 million ($7,156.6 million) in FY2011 from INR12,119.9 million ($2,642.1 million) in FY2008. Increase in loans registered a Compound Annual Rate of Changed (CARC) of 39.4% over the 200811 period. As a result, L&Ts interest and brokerage expenditure over the period 200811 increased to INR8,308.6 million ($181.1 million) from INR203.1 million ($44.3 million) in FY2008. L&Ts increasing debts is impacting the companys financial flexibility.

Opportunities
Strategic joint ventures strengthening business L&T has entered into several joint ventures in the recent past. In February 2012, L&T has formed a strategic partnership with Cyan Holdings plc, a UK-based integrated system design company to collaborate in the development, supply and delivery of advanced metering solutions comprising utility meters equipped with Cyan's wireless communication capability for AMI, smart metering and smart grid pilot projects. L&T and Cassidian entered into a partnership in February 2011, to become an electronics house for defense and security. Subsequently, the Defence and Security Division of Europe's leading Aerospace and Defence Group (EADS) was renamed as Cassidian. The joint venture will help L&T to serve the Indian armed forces as well as the global market with high-technology defense equipments.
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L&Ts joint ventures in diversified areas such as defense, transmission and distribution and power plant equipment market could strengthen its presence in these business lines and add to its expertise. Strong project pipeline ensures revenue growth L&T has a very strong pipeline of projects which would be completed in the next few years. Order book as at March 31, 2011 was worth INR1,302,170 million (approximately $28,387.3 million) as against INR1,002,390 million (approximately $21,852.1 million) as at March 31, 2009, recording a 29.9% year-on-year growth. Further, the companys order book inflow increased at a compounded growth of 27.1% since FY2007. It was primarily due to bulk orders received by the company from engineering & construction.This division received new orders worth INR730,130 million (approximately $15,916.8 million) in FY2011 for projects such as Hyderabad Metro, Seawoods Phase I complexes, IT park for TCS, MRO (Maintenance, Repair and Overhaul) facility at Nagpur, AIIMS hospitals at Jodhpur & Bhubaneswar; factories (for Maruti, P&G, and COD Jabalpur); cement plants; and others. Large number of projects in L&Ts pipeline is ensures a steady revenue growth. Growing Indian construction & engineering industry Construction & engineering industry in India is growing rapidly. The industry grew by 11.5% in 2010 to reach a value of $47.8 billion in FY2011. In 2015, the Indian construction & engineering industry is forecast to have a value of $71.5 billion, an increase of 49.6% since 2010. This industry is expected to register a Compound Annual Growth Rate of (CAGR) of 8.4% over the period 2010 15. In addition,

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government of India plans major capacity increase in the thermal power segment during its 12th Five-year Plan (201318). In 2011, Union government conferred infrastructure status to fertilizer industry which has created conducive environment for revamping and modification of fertilizer plants. L&T is one of the largest players in the Indian construction & engineering industry. The company and is well placed to leverage from the growing Indian construction & engineering industry and further enhance its business in the coming years. High global oil & gas capital expenditure plans likely to enhance business The global oil & gas capital expenditure (Capex) plans are forecasted to remain high over the coming years. This is likely to provide more business opportunities for the companys Engineering & Construction (Projects) division in FY2012. Key drivers of growth in this sector in near future include increasing brownfield prospects particularly in Middle East and Africa; the trend within Indian refining units going for downstream petrochemical units for value added products; and growing prospects in new business lines (gas processing, poly propylene and coal gasification). In addition, the growing thrust on gas production and transportation is expected to increase investments in cross country gas pipeline projects is expected to bring in more business. L&T is well placed to tap the growing global oil & gas capex plans and enhance its business in coming years.

Threats
Rise in cost of construction may affect margins L&T could be adversely affected by the rise in costs of construction. Costs of construction are on the rise globally as commodity prices are increasing. Rising costs are attributed to high oil and steel
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prices in international markets. The rise in crude prices, which averaged $89 per barrel in February 2011 and $103 per barrel in March 2011, will increase the cost of transportation. WTI prices are estimated to average $114 per barrel in 2012. In the beginning of 2012, the price of iron ore quoted more than $140.4 per ton, a 40% increase over the 2010 level and a figure that approaches an all-time high. Further, owing to increased demand from China and appreciation in the 'coal currencies' (currencies of coal dominating countries), such Larsen & Toubro Limited.

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Business Analysis
PESTEL analysis (External analysis):
The PESTEL analysis must be used as list of control. Each time a factor of the companys environment changes, it modifies the PESTEL as therefore the strategy to follow. The PESTEL is used in strategic planning in order to try and understand what is coming up in the future and how it can be managed. A PESTEL analysis means a Political, Economic, Social, Technological, Environmental and Law analysis. This could be defined as a study of macro-environmental factors in order to get information about the changing external environment that a company must take into consideration. Usually this is the external analysis of a market survey, helping to plan strategies, objective and policies, according to the changing environment. We are going to study in detail the current external environment of Larsen and Toubro EEngineering Solutions in India

1.Political Factors :
The political conditions in India are not much stable. The government changes after every five years and the new government brings its own policies and rules. Employment law: Traditionally Indian governments at federal and state level have sought to ensure a high degree of protection for workers (allegedly). So for instance, a permanent worker can be terminated only for proven misconduct or for habitual absence. So the company need to be vey careful before keeping any employee. _ Consequences of the new elections: In few months new Prime Minister will be elected and this might impact the working of L&T as new policies might be taken up. The government is also taking steps to increase foreign direct investment (FDI) in India which might create competition for L&T. _ Environmental policies: Environmental regulations are important as we all know its effects are society and people are becoming aware day by day.

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Concerning the company Larsen & Toubro EES, there is no worry to have about Environmental regulations because that concerns companies working with toxic products and other risky domains. The company produces services so there is no pollution.

2.Economical factors
Economic environment In India, the economic situation is not really good because of the depreciation of the rupee. The buying power of foreign companies is therefore not really high which could be a weakness for Larsen & Toubro EES which sells on B to B market but good Indian companies who have high exports can be a benefit for the L&T.

3.Social Factors
Culturally speaking, India has lots of social laws protecting people such as wages given every month to people or children below the age of 14 who cannot work. But concerning Indias populations growth rate, it follows a regular increase. Therefore it becomes difficult to provide employment to each. So it leads to such factors that the people end up working for low wages to earn their living. Also there are so many educated unemployed in India who do not get jobs. They have to work for less salary as well.

4.Technological factors
For a company like Larsen & Toubro EES, it is very important to take care of technological factors because it is an engineering company. One of the most important factors to take into consideration is the technology used for the production of engineering services. Indeed, the technology employed must be the latest in order to compete against other engineering companies. It is also important for the companies to be using the same software for example Catia V5, if not the companies cannot share information and therefore no services can be provided.
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The technological factors are permanently changing, the softwares are also updated regularly, new versions come on the market. The company need to purchase these new licences and train the employees in order to fulfil the customers needs.

5.Ecological factors
As we said before, there are regulations about ecology but Larsen & Toubro EES does not have to worry about it because that concerns companies working with dangerous product or collaborating to environmental changes. Larsen & Toubro EES definitely uses a trend by explaining to their customers that using their services saves money and time but also saves energy. When a product is designed by computer everything is tested for the assembly; for example with human simulation explained bellow, a prototype is produced the mistakes are inexistent and there is no need to produce a new one, you know that the employee will be able to accomplish the work as the assembling process has been checked.

6.Law factor:
There is no special legislation for the trade of engineering services in India. However there are many acts formed like The Apprentices Act, 1961, The Trade Unions Act, 1926, etc and non-profit organisation is formed i.e. NASSCOM which is known worldwide. The National Association of Software and Services Companies (NASSCOM) is a trade association of Indian Information Technology (IT) and Business Process Outsourcing (BPO) industry. Established in 1988, NASSCOM is a non-profit organisation. NASSCOM is a global trade body with over 1200 members, of which over 250 are global companies from the US, UK, EU, Japan and China. NASSCOM's member companies are in the business of software development, software services, software products, ITenabled/BPO services and e-commerce. NASSCOM has been a proponent of global free trade in India. NASSCOM was set up in 1988 to facilitate business and trade in software and services and to encourage advancement of research in software technology. It is a not-for-profit organisation, registered under the Indian Societies Act, 1860. Currently, NASSCOM is headquartered in New Delhi, India with regional offices in the cities of Mumbai, Chennai, Hyderabad, Bangalore, Pune and Kolkata.

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Porter Five Forces Analysis

Information Technology Services Rivalary Threat of Substitute (Low) (High) Bargaining Power of Supplier (Moderate)

Threat of new entrant (High)

Description:

Bargaining Power of Buyers (High)

1) Threat of Substitute: Since all company are based on information technology for robustness of their work, there is hardly any alternative for IT and there is low threat .
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2) Rivalry: with many MNC company and few Indian global companies already in this business , the business rivalry is already very high. 3) Bargaining power of suppliers: Although companies like Intel and AMD are a part of the IT industry, for the purpose of this project I will be classifying those companies as suppliers to the IT industry's firms. But suppliers are good in numbers and carry good relation with companies and technologies and IT infrastructure cost are already low the bargaining power of suppliers are moderate. 4) Bargaining power of Buyers: In an industry as massive as Information Technology, the term "buyers" refers to almost everyone in the world. While there are countries that are behind technologically, a majority of locations in the world have access to computers and the internet etc. Given the large number of buyers, it is safe to say that the customers control the IT industry. So the bargaining power of buyers is very high 5) Threat of New Entrants: The IT industry is relatively attractive to newcomers because of its rapid growth and appealing customer base. The entry is also easy for new comers. So the threat of new entrant is high.

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Engineering and Construction Services Rivalary Threat of Substitute (High) (High) Bargaining Power of Supplier (Low)

Threat of new entrants (Low) Description:

1) Threat of Substitute:

Bargaining Power of Buyers. (High)

New and emerging innovative methods and processes within construction industry. New innovative methods are at a lower cost than traditional method, Low switching costs once a project is complete, new consultants may be appointed. Thus the threat of substitute is high. 2) Rivalry:
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with many MNC company and few Indian global companies already in this business , the business rivalry is already very high. 3) Bargaining power of suppliers: Industry members such as the principal contractors Construction materials are readily available from many suppliers. Switching costs of contractors Q.S firms are low. Contractors, sub-contractors and manufacturers have to work together for successful delivery of the project. Thus bargaining power of suppliers are low. 4) Bargaining power of Buyers: With so many engineering and construction companies, customers have many option to choose from. So bargaining power is high. 5) Threat of New Entrants: Customers want brand to be associated while buying. Since majority of business has already in the hand of big player, entry to new player is not easy.

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L&T Financial Services

Rivalary Threat of Substitute (High) (High) Bargaining Power of Supplier Moderate

Threat of new entrant (High)

Bargaining Power of Buyers High

Description:
1) Threat of Substitute:

Customers have many option to investment like mutual funds, insurance etc, so there are
many substitutes for financial services and substitutes threat are very high. 2) Rivalry: Not only there major company in financial services but there many consultant to guide customers for investment. Therefore rivalry is very high. 23

3) Bargaining power of suppliers:

Mutual fund companies, hedge funds, other broker dealers in structured deals, separate account managers, but due to high competition in market there power to bargain is moderate.Bargaining

power of suppliers are moderate.

4) Bargaining power of Buyers: Shifted dramatically toward the favour of the buyers. Because proper full information, faster access, Bargaining power of buyers is very high. 5) Threat of New Entrants: There will not be any new large mass-market players or niche players bursting on the scene, but there will be new independent broker dealer players as well as discounters, banks, insurance companies and credit unions. Count as well the independent shops where a broker can set up shop literally overnight

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L&T Insurance Services

Rivalary Threat of Substitute (High) (High) Bargaining Power of Supplier (Low)

Threat of new entrant (Low)

Bargaining Power of Buyers (High)

Description:
1) Threat of Substitute: As said customers have many option to invest, So threat of substitutes are high 2) Rivalry: Not many company are in these industry but one big major player LIC covers the

70% of the market. So rivalries are high in these industry.

3) Bargaining power of suppliers: Since Customers have many option, people incest in insurance and thus it is not widely accepted in India. So supplier power are low. 25

4) Bargaining power of Buyers: Customers have many option as earlier mentioned thus there power is very high. 5) Threat of New Entrants: Due to existing big player and customer negligence for insurance, there is barrier to entry for new entrant.

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Strategic Formulation (Grand)

Audacity in vision. Focus on what know best. Trim flab to achieve operational excellence. Good governance made the business sense. Develop leaders from within. Forge stronger partnerships with supplier base. Pursue quality with zeal. Innovate to create value for customers. Give back to the society The Indian edge

1. Vision
Excellence and professionalism. Customer delight through service. Entrepreneurial leadership and creation of an organization that is on the path of continuously learning by fostering teamwork, trust, and care. Community service and environmental protection. Company strongly drove by its global vision to become an Indian Multinational Program LAKSHYA which outlines a strategic plan for 2005-10 will assist in this.

2. Core Competencies
Today the core competence of L&T lies in its ability to ynthesize,integrate and harmonize its diverse worldclass engineering,manufacturing, procurement, construction and fabrication skillsaround turnkey projects (in core economic sectors) and people.

3. Business Leadership
With the Project and Construction business in the country growing at a fast pace and expected to continue to do so with the countrys emphasis on infrastructure, both L&T ECC (Construction group)and L&T's Projects (EPC) businesses are being treated as thrustareas. The ECC construction group has been responsible forconstruction landmarks both in India and abroad. L&T holds a leadership position in India in most of the areas in which it operates. The first company to introduce hydraulic excavators in the country, it still maintains its leadership status in this and in the vibratory compactor segments. It continues to be a leader in the manufacture of Z-Line petrol pumps and its cement is considered to be of high quality. L&T has pioneered the manufacture and supply of critical nuclear reactors and space vehicles hardware in the country and so on.

4. Decision-making
Over the years, the company has implemented its vision through various approaches. Foremost is the emphasis on empowerment. Team-work and continuous training of employees. The company is decentralized for all practical purposes. Budgetsand allocations are made at the beginning of the year forachieving the targets. Only
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through empowerment and decentralized decision making can a highly diversified company like L&T be managed. Only inmajor decisions involving capacity augmentation, businessdivestment, diversification, and so on does the CEO personally involve himself

5. The Culture of TQM

Employees have realized that everybody in every department is supplier to somebody in the organization if not directly to an outside customer. Employees are being trained in multiskills, including quality transactions and market engineering, besides product engineering.

6. Human Resource Management

With people being regarded as the 'prime movers', a strong HRD culture pervades the organizations personnel policies, and HRD systems are designed to sustain motivation, encourage learning, and achieve higher levels of quality and productivity through job involvement. Quality Training and Development of Human Resources is realized through: Identifying training needs within the Organization anddesigning and implementing those n eed based trainingprogrammes To bring about continuous up gradation of knowledge, skills and employee attitudes. The following brief highlights ECC's training methodology for the comprehensive development of its 7000-odd employees. Inclusion of stakeholders and delegates

7. Contribution to Academics
L&T set up L&T Institute of Technology, a polytechnic in Mumbai. IN a short period, it has come to be widely regarded as one of the best training institutions of its kind in the country, particularly for the full-fledged workshops and laboratories that provide a strong practical orientation to theoretical inputs. There is a good demand n engineering companies for the students passing out from this Institute.

8. Environment Up gradation
L&T has been showing its commitment towards corporatecitizenship.As one goes around the works and offices of L&T, one experiences soothing and refreshing ambience because of the rich foliage and delightful floral blooms around these structures.L&T has undertaken extensive tree plantation programme toenhance green concepts. Over three lakh trees were planted in and around the factory in1993-94 under the programme 'Trees for Life'. The villagers have been given grafted saplings of fruit-bearing trees and encouraged to plant them. The success of this on-going effort led to L&T being selected by the Government of Maharashtra for the prestigious Vanashree award in 1990
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BCG Growth Share Matrix:

Growth Rate
Low
Low

High

Low

L&T medical equip,plastic,switch gear

Market Share

L&T infotech

High L&T Construction L&T solar power

Dogs - Dogs have low market share and a low growth rate and thus neither generate nor consume a large amount of cash. However, dogs are cash traps because of the money tied up in a business that has little potential. Such businesses are candidates for divestiture. L&T to divest medical equipment business, plastics business and switchgear unit Question marks - Question marks are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash comsumption. A question mark (also known as a "problem child") has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market

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growth declines. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.example L&T solar power. Stars - Stars generate large amounts of cash because of their strong relative market share, but also consume large amounts of cash because of their high growth rate; therefore the cash in each direction approximately nets out. If a star can maintain its large market share, it will become a cash cow when the market growth rate declines. The portfolio of a diversified company always should have stars that will become the next cash cows and ensure future cash generation. Example L&T IT(information technology) segment Cash cows - As leaders in a mature market, cash cows exhibit a return on assets that is greater than the market growth rate, and thus generate more cash than they consume. Such business units should be "milked", extracting the profits and investing as little cash as possible. Cash cows provide the cash required to turn question marks into market leaders, to cover the administrative costs of the company, to fund research and development, to service the corporate debt, and to pay dividends to shareholders. Because the cash cow generates a relatively stable cash flow, its value can be determined with reasonable accuracy by calculating the present value of its cash stream using a discounted cash flow analysis. Example L&T construction.

Ansoff Growth Matrix for L & T

Existing Products

New Products

Existing Market

Market penetration

Product Development

New Market Market Development Diversification

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1. Market Penetration
L & T have talented professionals , in every sphere of its operations , technology is the key enabler, reinforcing its leadership position , and sustain its competitive strengths in existing market. For L & T technology represent endless technologies. Also its Market penetration segment is Engineering and Construction and Manufacturing. It has good financial and capital position , as well access to multiple sources of capital. products : Low tension switchgear and accessories Power gear

Building Electricals
Industrial Automation

2. Product Development
L & T has introduced new products in existing market. It has introduced Analog panel meters and current transformers, MHO single phase starter , ML series contractor. This were the efforts for the product development. Focused on growth of their retail loan portfolio.

3. Market Development
It is the growth strategy where the Business seeks to sell its existing products into new market. Besides having offices and employing a direct sale force, L&T has developed a strong network of agents across the globe to effectively carry out the business development related activities. The company regularly participates in various international seminars , and industry conventions , which enable L & T showcase its technical capabilities and core strengths with leveraging client references. It has continued to expand the business to include new products and services , as well as entirely new line of Business. 4.Diversification Larsen and Toubro(L&T) has diversified over the past three decades around its core competence in construction engineering. Originally the firm only made parts and machinery for construction. Later the firm diversified into excavating and Earth moving equipment and still later into the cement industry thus taking a stake in one of the vital inputs to its Industry. Each of these diversifications addressed the scope opportunity for a firm which had a clear definition and understanding of its Competitive Space.
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GE Matrix
INDUSTRY ATTRACTIVENESS
The IT industry in India has today become a growth engine for the economy, contributing substantially to increases in the GDP, urban employment and exports, to achieve the vision of a powerful and resilient India. Indian firms, across all other sectors, largely depend on the IT & ITeS service providers to make their business processes efficient and streamlined. Indian manufacturing sector has the highest IT spending followed by automotive, chemicals and consumer products industries. Nasscom expects the IT services sector in India to grow by 13-14 per cent in 2013-14 and to touch US$ 225 billion by 2020.

BUSINESS STRENGTH
It is the 8th largest company in india. Clients include industry leaders like Chevron, Freescale, Hitachi, Sanyo and Lafarge, among others. They have found in us a right-size partner who combines scale, stability and customer-centricity. STRONG DOMAIN CONNECT Solutions have a strong domain focus that helps clients in different industries maximize the value of their IT spend. PROACTIVE INVESTMENT IN PEOPLE AND INFRASTRUCTURE Revenue has increased four times in four years (between 2003 and 2007) and so has associate strength and they expect to continue with this high level of growth. Key strength is people and they have created systems that allow them to attract, train and retain the best talent. They are also investing ahead of the curve by establishing state-of-the-art delivery centres. Their robust IT infrastructure delivers assured business continuity.

Therefore, Industry attractiveness is HIGH. Business strength is MEDIUM.

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CONCLUSION L&T should Invest selectively for growth.

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VALUE PROPOSITION
A value proposition is generally a clear statement that outlines to potential clients and stakeholders a company's (or individual's or group's) unique value-creating features. A value proposition is a clear statement of the tangible results a customer gets from using your products or services. A value proposition is an offer to some entity or target in which they (the possessor) get more than they give up (merit or utility), as perceived by them. A value proposition is the basic reasoning for why people should consider your product or service. Describes what you do in terms of tangible business results. It draws interest and shares a success story within a few words.

NEED
A strong VP will help you break through the clutter and get the prospects attention Many are trying to use heavy force of marketing to overcome the weak force of

their VP A VALUE PROP STATEMENT MUST CONTAIN: 1. 2. 3. 4. Describe "What" we provide Answer "So what?" Quantify "How much" Provide Proof System Integration with comprehensive domain expertise and ability to deliver engineered solutions for all layers of the automation hierarchy. Leveraging on the vast manufacturing expertise and worldwide presence of Larsen & Toubro group of Companies.

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Backed by 75 years of engineering excellence, L&T Technology Services delivers strong engineering pedigree that helps us engage very closely with our customers to provide end to end solutions spanning all stages of a product lifecycle providing:

Global footprint in US, Europe and Asia, including designated consultant in each of these geographies. Flexible Operating Models. Ability to engage with customers in large and critical engineering programs

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Bibliography:
www.larsentoubro.com www.studymode.com

consultingwithresults.wordpress.com

http://businesscasestudies.co.uk/rolls-royce/competing-within-a-changing-world/porters-fiveforces-model.html#axzz2du0lAJea http://en.wikipedia.org/wiki/Larsen_%26_Toubro
www.businesswire.com

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