A PROJECT ON

"EXPORT MARKETING"
HINDUSTAN AERONAUTICS LIMITED

Submitted by:
Raman Bisht
rd
MBA 3 SEM SECTION ‘C’
SPECLIZATION ON MARKETING

Under the guidance of:

INDUSTRY GUIDE FACULTY GUIDE

MR. SACHIN KHARE MR. ARVIND KULKARNI
MARKETING PLANNER

(SUMMER INTERNSHIP REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME

MASTERS IN BUSINESS ADMINISTRATION (2008-10))

INSTITUTE OF BUSINESS STUDIES AND RESEARCH

PUNE

2008-2010

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 STATEMENT BY THE CANDIDATE

I hereby certify that I, _______________________ have successfully completed my

internship with “HINDUSTAN AERONAUTICS LIMITED.” in the month of June-

July ‘09 from (01/06/09 to till 31/08/09). This is also to certify that this report is an

original product and no unfair means like copying etc… have been used for its

completion.

Name: RAMAN BISHT

Signature:

Date:

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 CERTIFICATE BY FACULTY GUIDE

Certified that this report is prepared based on the summer internship project undertaken
by me in HINDUSTAN AERONAUTICS LTD. , LUCKNOW to June-July ‘09 from
(01/06/09 to till 31/08/09).,under the able guidance of Prof . Arvind kulkarni in partial
fulfillment of the requirement for award of degree of Master in Business
Administration from Institute Of Business Studies And Research, Pune

Date. ___________________

(Institute of Business Studies and Research) (Prof. Arvind Kulkarni)

Student Faculty Guide

3
 CERTIFICATE BY INDUSTRY GUIDE

Certified that this report is prepared based on the summer internship project undertaken
by me in HINDUSTAN AERONAUTICS LTD. , LUCKNOW to June-July ‘09 from
(01/06/09 to till 31/08/09).,under the Able guidance of MR SACHIN KHARE.

Date. ___________________

(Institute of Business Studies and Research) ( Sachin Khare)

Student Industry Guide

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 ACKNOWLEDGEMENT

No task is a single person effort, same is with this project. Thus I would like to extend

my sincere thanks to all those people who helped me in accomplishing my project.

I owe my project success to all faculty members, especially our Director for providing us

with this wonderful opportunity and guidance. I would like to extend my special gratitude

to Prof. Arvind Kulkarni for providing excellent facilitation for the successful completion

of this project. This project provided me a platform to increase my knowledge and

empowered me with a better understanding of concepts in the real world scenario. And

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last but not the least special thanks to “HINDUSTAN AERONAUTICS LIMITED” who

accepted me in spite of my inexperience in the field and gave me the opportunity to work

and learn with them.

(Raman Bisht)

TABLE OF CONTENTS
SYNOPSIS

OBJECTIVES

 Introduction

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 Organizational profile of the company

 History

 Product line

 Research Methodology

 Sources of data

 Methods of data collection

 Data analysis and Findings

 Conclusion

 Suggestions

 Questionnaire

 Bibliography

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 TABLE OF GRAPHS

Graph 1 63
Graph 2 64
Graph 3 65
Graph 4 66
Graph 5 67
Graph 6 68
Graph 7 69
Graph 8 70
Graph 9 71
Graph 10 72
Graph 11 73

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 SYNOPSIS

Project Title:- "Export Marketing" .

Project Objective:-To have better knowledge of how export and import control can be
done more effectively.

Methodology Adopted:- Study and observation of the commercial and logistics

department, collection of secondry data, use of questionaire.

Brief Summary of the Project:- I had to study the commercial department thouroly. The
project is mainly concerned with how export marketing is done, the methods and
techniques of export and import management.

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 THEORITICAL
PRESENTATION OF THE
TOPIC

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 The beginning of HAL can be traced to the year 1940 when a farsighted
industrialist,the late Seth Walchand Hirchand set up a company an aviation
industry that can manufacture, assemble and overhaul in collaboration with
inter continental aircraft compay of USA.
In the six decade the HAL has spread its wings to coiver various
activities in area of design,development,manufacture and maintenance.HAL
has bagged top exporter’s award from Engineering Export promotion
council for continuously last 9 years .it has also been awarded “Excellent
performing Public Sector Enterprise” from India institute of Industrial
Engineering.

HAL Management Academy

(HMA) was established by the
corporate management of
Hindustan Aeronautics Limited,
way back in August 1969, under the
then name of HAL Staff College. It
was re-named HAL Management
Academy in June 2001 to reflect its focus on management development,
consultancy and research. HMA has now competed 35 years of fruitful
contribution to the cause of management education.

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Responding to the need amongst practising managers to constantly refresh
and update their managerial skills, HMA offers a variety of programs in an
open and short duration format. These programs form a part of a larger focus
on Executive education. HMA’s programs prepare practising managers to
meet the challenges of today’s dynamic business milieu.

These programs provide exposure to the latest development in managerial

practice at a global as well as local level.

HMA’s programs break fresh ground in management thinking as well as

practice. Participants gain insight into both theory as well as application of
the latest in management. Participants are encouraged to apply learning in
their organizational contexts, with a view to formulate strategies for post-
program implementations.

Programs at HMA provide not just individual learning, but also the
opportunity to network with other practicing managers in the area, providing
for active sharing of experience as well as building useful contacts.

The programs offered are conducted by HMA Faculty, who provide a unique
blend of academic, research as well as consulting skills. In addition, all
participants have access to the vast infrastructure as well as resources of the
institute.

MANAGEMENT DEVELOPMENT PROGRAMS

The Programs conducted at HMA are broadly categorized into

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 • Individual Development
• General Management
• Functional/ Technical Programs
• Leadership Programs

Certain programs provide opportunity for experiential learning inside and

outside the classroom. Action oriented learning is imparted through
outbound training in serene settings away from the hustle bustle of the city.

FACULTY

HAL Management Academy has qualified and experienced full time faculty
who have worked for several years in production divisions. In addition,
senior executives from different divisions are also invited as guest faculty.
Apart from this, expert faculty from reputed institutions like the Indian
Institute of Management, the Indian Statistical Institute, the Administrative
Staff College of India, the Indian Institutes of Technology, the Indian
Institute of Science and other well known trainers, consultants are also
invited to handle sessions on specialized topics.

METHODOLOGY

HMA continuously reviews and modernizes its knowledge delivery systems

to add value to the services offered by it. A balanced mix of training
methods are used in the Programs. Interactive learning is supplemented with
case studies, syndicate work, role plays, management games, computer
simulated business experiences, outbound training, book reviews, panel

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discussions and project work. All participants are assigned project work. The
knowledge thus gained can be used in their respective work areas. Outbound
training provides them with opportunities for transformation to become
effective leaders and team players.

SOME PROGRAM THEMES

• LEAN Management
• Visionary Thinking through Strategic Management
• Human Resource Management for Competitive
Advantage in the dynamic environment
• Personality Development for Corporate Excellence
• Integrated Material Management & Supply Chain
Management for Value Addition
• Quality Management
• Finance Management
• Induction and Basic Management Program for new
entrants.

TOOLS FOR TRAINING

Diagnostics, experience-sharing, action-planning and learning diary help in

enhancing the effectiveness of learning. Diagnostics exercise enables
participants to identify difficulties faced in their work-place, helps them in
analysing the situation and arriving at remedial solutions. The Learning
Diary helps participants identify key learning points. Individual and group

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action plans are the means for transferring learning from the classroom to
the work-place.

AMBIENCE

A sprawling building amidst thick

foliage, lush lawns, pathways and
flower beds provide a serene retreat
from the distractions of the bustling
metropolis. This ambience has a
soothing effect on the minds of the participants and takes them away from
the hectic business scenes to an idyllic location where they can review their
contribution from more creative perspectives.

INFRASTRUCTURE

• Training Halls

HMA has five air-conditioned and

acoustically-treated training halls with
seating capacity varying from 15 to 50,
with flexible seating arrangements. Each
classroom is equipped with an Overhead projector, writing board, Public
Address System, Digital Light Processing Projector (DLP), computer with
the necessary state-of-the-art software to make presentations.

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 • Library

A good library with over 12000 books

mainly on management topics, a number
of professional journals and an impressive
collection of audio-visual aids supplement
classroom learning and assignments.

• Auditorium
An auditorium air-conditioned and acoustically designed with 180
seats is also available for viewing films / videos and conducting
seminars. A well-lit dais is also suitable for cultural Programs by
participants.
• Accommodation
Forty fully furnished twin occupancy rooms and five dormitories
provide accommodation for a hundred participants. A neat and tidy
cafeteria within the campus provides nutritious food and caters to the
palate of the participants from all over the country.
• Recreation Centre

The recreation centre is equipped with a home-gym, facilities for

indoor and outdoor sports and also a television set, which provide the
participants the much needed relaxation during the off-hours and
holidays. A lot of newspapers and magazines are also available.

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ORGANIZATIONAL PROFILE

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18
 HISTORY OF HAL

Hindustan Aeronautics Limited (HAL) came into existence on 1st

October 1964. The Company was formed by the merger of Hindustan
Aircraft Limited with Aeronautics India Limited and Aircraft Manufacturing
Depot, Kanpur.

The Company traces its roots to the pioneering efforts of an industrialist

with extraordinary vision, the late Seth Walchand Hirachand, who set up
Hindustan Aircraft Limited at Bangalore in association with the erstwhile
princely State of Mysore in December 1940. The Government of India became a
shareholder in March 1941 and took over the Management in 1942.

Today, HAL has 19 Production Units and 9 Research and Design Centers in 7 locations
in India. The Company has an impressive product track record - 12 types of aircraft
manufactured with in-house R & D and 14 types produced under license. HAL has
manufactured over 3550 aircraft, 3600 engines and overhauled over 8150 aircraft and
27300 engines.

HAL has been successful in numerous R & D programs developed for both Defense and
Civil Aviation sectors. HAL has made substantial progress in its current projects :

• Dhruv, which is Advanced Light Helicopter (ALH)

• Tejas - Light Combat Aircraft (LCA)
• Intermediate Jet Trainer (IJT)
• Various military and civil upgrades.

Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard in
March 2002, in the very first year of its production, a unique achievement.

HAL has played a significant role for India's space programs by participating in the
manufacture of structures for Satellite Launch Vehicles like

• PSLV (Polar Satellite Launch Vehicle)

• GSLV (Geo-synchronous Satellite Launch Vehicle)
• IRS (Indian Remote Satellite)

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 • INSAT (Indian National Satellite)

HAL has formed the following Joint Ventures (JVs) :

• BAeHAL Software Limited

• Indo-Russian Aviation Limited (IRAL)
• Snecma HAL Aerospace Pvt Ltd
• SAMTEL HAL Display System Limited
• HALBIT Avionics Pvt Ltd
• HAL-Edgewood Technologies Pvt Ltd
• INFOTECH HAL Ltd

Apart from these seven, other major diversification projects are Industrial Marine Gas
Turbine and Airport Services. Several Co-production and Joint Ventures with
international participation are under consideration.

HAL's supplies / services are mainly to Indian Defence Services, Coast Guards and
Border Security Forces. Transport Aircraft and Helicopters have also been supplied to
Airlines as well as State Governments of India. The Company has also achieved a
foothold in export in more than 30 countries, having demonstrated its quality and price
competitiveness.

HAL has won several International & National Awards for achievements in R&D,
Technology, Managerial Performance, Exports, Energy Conservation, Quality and
Fulfillment of Social Responsibilities.

• HAL was awarded the “INTERNATIONAL GOLD MEDAL AWARD” for

Corporate Achievement in Quality and Efficiency at the International Summit
(Global Rating Leaders 2003), London, UK by M/s Global Rating, UK in
conjunction with the International Information and Marketing Centre (IIMC).

• HAL was presented the International - “ARCH OF EUROPE” Award in Gold

Category in recognition for its commitment to Quality, Leadership, Technology
and Innovation.

• At the National level, HAL won the "GOLD TROPHY" for excellence in Public
Sector Management, instituted by the Standing Conference of Public Enterprises
(SCOPE).

The Company scaled new heights in the financial year 2006-07 with a turnover of
Rs.7, 783.61 Crores.

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 HAL’S VISION, MISSION, OBJECTIVES AND STRATEGIES

VISION

"To make HAL a dynamic, vibrant, value-based learning organisation with human
resources exceptionally skilled, highly motivated and committed to meet the current and
future challenges. This will be driven by core values of the Company fully embedded in
the culture of the Organisation"

MISSION

Enable all those working for HAL to give their best to ensure their all-round growth as
well as that of the Organization

OBJECTIVES

• To ensure availability of Total Quality People to meet the Organizational Goals

and Objectives

• To have a continuous improvement in Knowledge, Skill and Competence

(Managerial, Behavioral and Technical)

• To promote a Culture of Achievement and Excellence with emphasis on

Integrity, Credibility and Quality

• To maintain a motivated workforce through empowerment of Individual and

Team- building

• To enhance Organizational Learning

• To play a pivotal role directly and significantly to enhance Productivity,

Profitability and improve the Quality of Work Life

STRATEGIES

• To be in total alignment with Corporate Strategy

• Maintain Human Resource at optimum level to meet the objectives and goals of
the Company

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• Be competent in Mapping, Analysis and Up gradation of Knowledge and Skills
including Training, Re-training, Multi-skilling etc

• Cultivate Leadership with Shared Vision at various levels in the Organization

• Focus on Development of Core Competence in High-Tech areas

• Build Cross-functional Teams

• Create awareness of Mission, Values and Organizational Goals through out the
Company

• Introduce / Implement personnel policies based on performance that would ensure

growth, Rewards, Recognition, Motivation.

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HAL’S PRODUCTS

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HAL’S SERVICES

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HAL’S DIVISONS

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HAL’S EXPORTS

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 CUSTOMERS
International Customers
• Airbus Industrie, France
• APPH Bolton, UK
• BAE Systems, UK
• Chelton, UK
• Coast Guard, Mauritius
• Corporate Air, Philippines
• Cosmic Air, Nepal
• Dassault Aviation, France
• Dowty Aerospace Hydraulics,
UK
• EADS, France
• ELTA, Israel
• Gorkha Airlines, Nepal
• Hampson, UK
• Honeywell International, USA
• Island Aviation Services,
Maldives
• Israel Aircraft Industries, Israel
• Messier Dowty Ltd., UK
• Mistubishi Heavy Industries,
Japan
• MOOG, USA
• Namibian Air Force, Namibia
• Peruvian Air Force , Peru
• Rolls Royce Plc, UK
• Royal Air Force, Oman
• Royal Malaysian Air Force,
Malaysia
• Royal Nepal Army, Nepal
• Royal Thai Air Force, Thailand
• Smiths Industries, UK
• Snecma, France
• Strongfield Technologies, UK
• The Boeing Aircraft Company,
USA
• Transworld Aviation, UAE
• Vietnam Air Force, Vietnam
Domestic Customers
• Air India
• Air Sahara
• Airports Authority of India
• Bharat Electronics
• Border Security Force
• Coal India
• Defence Research & Development
Organisation
• Govt. of Andhra Pradesh
• Govt. of Jammu & Kashmir
• Govt. of Karnataka
• Govt. of Maharashtra
• Govt. of Rajasthan
• Govt. of Uttar Pradesh
• Govt. of West Bengal
• Indian Airforce
• Indian Airlines
• Indian Army
• Indian Coast Guard
• Indian Navy
• Indian Space Research Organisation
• Jet Airways
• Kudremukh Iron ore Company ltd.
• NALCO
• Oil & Natural Gas Corporation Ltd.
• Ordnance Factories
• Reliance Industries
• United Breweries
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FLOW OF WORK

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Foreign suppliers are paid by any of the following methods as stipulated in the
P.O./License agreement/contracts –
(a) Letter of Credit
(b) Sight Draft.
(c) Advance Payment
(d) Direct Payment.

Bills of entry: It is a document filled by custom officers for giving custom clearance
to the goods received from foreign countries. Bills of entry are received by the agents
before receiving of goods. It includes:
1
2 1. Total number of packages
3
4 2. Total amount of duty paid

5 3. Invoice value

6 4. Freight

7 5. Insurance

8 6. Exchange rate

9 7. Accessible value

RECEIVING CUM DISCREPANCY REPORT:

RDR (Receiving cum discrepancy report) is prepared at the time of receiving of goods
within organization. Pricing of RDR is done by two methods:
1
2 1. If the payment is done in advance and goods received later, then the RDR is
3 priced at the value of exchange rate of the last day of the previous month.
4
5 2. If payment is done on the same day then the RDR is priced at value at which
payment is done.

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FLOW OF RDR (Receiving cum Discrepancy Report) ON RECEIPT
OF MATERIAL

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 CORE BUSINESS OF HAL

• Design and development of fixed and rotary wing Aircraft, engines,

Avionics and accessories.

• Manufacturing, maintenance, repair and overhaul of

 Fighter, transport and trainer Aircraft

 Helicopter

 Aero engines

 Accessories

 Ground support Equipments

•Manufacturing of structural components for satellite and launch

vehicles

•Software development for aerospace application

•Design consultancy

HAL carries high burden of responsibly towards Indian Armed Forces.

95% of the product produced by HAL is for IAF.AL is engaged in
production of 20 types of Aircraft out of which 11 are indigenously
developed and other are developed in-house after getting technology under
license from different countries. The countries from which HAL has
obtained license are:

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  U.K

 FRANCE

 SWEDEN

 RUSSIA

ACCESSORIES DIVISION,LUCKNOW

Accessories division of HAL was established in 1970 with the primary

objective of manufacturing systems and accessories for various Aircraft and
Engines to attain self sufficiency in this area. At present it is turning out over
974 types of accessories. The division right from the beginning laid A lot of
emphasis on developing indigenous capability for design and development
of various systems and accessories.

The division is diversified not only in other defence applications like Tanks
and Armoured vehicle for Army, it explored possibility of commercial
applications of its- accessories. The division has been in forefront of
accessories development and supply not only to Indian Air Force but to
division today has a prime name in Aviation market and various
International countries are interested to join hands with it for future projects.
Division has also made steady progress in areas of export.

PRODUCT DIVERSITY

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Due to diverse technology the division is divided into 3 factories and more
than 900 accessories are being manufactured in various engineering.
FACTORY NO OF ACCESSORIES
1. Mechanical 537
2. Instrument 412
3. Fuel 25
Total 974
The division is engaged in repair and overhaul of accessories, with
turn-around-time is best in the industry. This has been the forte for over two
decades from piston to supervise Aircraft[both civil & millitary].Site repair
facilities are extended by HAL team of expert engineers/technicians.
SERVICES PROVIDED FOR;
Military Aircraft
 MIG series
 Jaguar
 Mirage-2000
 Sea-harrier
 AN-32
 Kiran MK-I/MK-II
 HPT-32
 SU-30[proposed]
Civil Aircraft
 Dornier
 AVRO HS-748

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Helicoptors
 Chetak [aloutte]
 Cheetah [lama]
 ALH [IAF/NAVY/COAST GAURDS/CIVIL]
Manufacture and supply of complete range of
Components of Cheetah and Chetak helicopters,Jaguar and MIG Series
aircraft to domestic and international customers to support their fleet at
most competitive prices and delivery lead time.
NEED EOR MARKETING IN HAL
 There was a huge cut back in Defence expenditure and budgetary
support.
 Liberalization in economy making purchasing costlier.
 Only best can survive in this competitive age.
 Large number of marketing opportunities.
 Large export potential

 Constant increase in non-civil operations.

 Decrease in work load because of betterment of technology.

 To earn foreign exchange and increase international trade.

GOALS OF MARKETING
 To increase customer base
 To acquire new customers
 To improve existing order book
 To obtain further workload
 To create visibility of divisions

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  To become financially self reliable
 To increase total customer satisfaction
 To explore the thrust areas of new avenues as customer
 To advertise products and facilities of the division through
 Exhibition, seminar etc.

 Closer and prompt interaction with;

-component marketing
-airframe division
-authorised agent in foreign countdown
ACTION BEING TAKEN TO MEET
MARKETING GOALS

 Defining marketing strategies

HAL participates in various air shows[domestic and international]for
exhibition of various ranges of aircrafts And services being offered by
HAL.It also maintains a Website[www.hal-india.com] wherein it
provides information about its products and services.

 Doing SWOT Analysis

 Defining Product-Market Strategy Mix
1.>It relates products with market and demands.

 Identifying Suitable Markets

It regularly observes and studies the need of various

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 Countries and based an their requirement identifies the
Market for its products.

 Creating Specific Marketing Material

It is engaged in customized production i.e.need basic
Production of aircrafts and its accessories.

 Closer Prompt Interaction With;

-Airframe Divisions
-Associated Departments
-Corporate Marketing Divisions

 Corporate with selling agents,licensors and collaborators

 Manage camp offices in different countries in order to get
Feed back from the customers and solving their queries.
 For mainting closer and better relations it also stations liai-
Son offices of Airforce,Navy and Army divions of HAL.

Role Of Marketing Department In HAL

The Division was initially entrusted the task of fulfilling the needs of Indian
Defence Forces.However,due to change in aviation scenario liberalization of
the economy in the country,the management Has identified Indigenisation
and Export as the key thrust areas.

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 To pursue the above strategy,the Marketing Cell[now marketing
department]was constituted in the division in December 1992 marketing
department serve a single contact point for all the overseas, Civil[domestic]
and DRDO customers and it deals in;
 Identification of suitable market.
 Create visibility of division and its products in market.
 To increase customerbase/acquire new customers.
 Preparation of Tecno-Commercial Proposals.
 Improve order book/obtain work-load.
 To in increase total customer satisfaction.
 Create specific marketing materials.
 To advertise products and facilities of the division through
 Exhibition, seminars etc.
 Closer and prompt interactions with
Corporate marketing
Airframe divisions
Authorized agents in foreign countries
Licensors/collaborators
Associated departments

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 WORKING OF MARKETING DEPARTMENT
EXPORT MARKETING
Supply of products: This is broadly categorized as under :-
a) ADL product range.
b) Customized requirements i.e. Sub-Contract.

Technical/Commercial Proposal against RFQ/RFP :

Enquiries from overseas customers for submission pf proposals /
quotations for their defence & civil needs are received in Marketing
Department. The Techno-Commercial proposals are prepared by Marketing
Department in consultation with all associated departments and the same
after approval by competent Financial Authority (CFA) is forwarded to the
customer. The system flow Chart for the activities/interactions involved is
illustrated at Annex-3.1A .

Execution of Purchase Orders :

Purchase Orders/Contracts from overseas customers received in
Marketing Department are reviewed and compared with Techno-
Commercial proposals submitted by ADL. It is ensured that Purchase Order
is in line with ADL proposal and Technical & Commercial requirements of
customers can be met by ADL differences, if any are sorted out by written
communication/Purchase Order amendments.

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Repair & Overhaul :
Enquiries from overseas customers regarding confirmation on ADL
capability for undertaking repair/overhaul of items is received by Marketing
Department. Feasibility confirmation and indicative prices are intimated to
customer in consultant with associated departments and approval by CFA.
On receipt of Repair Order and unserviceable unit from the customer,
the unit is loaded to Assy & Test shop for Snag confirmation and repair
work assessment including replacement of defective parts. Based on the
work involved the Repair/overhaul prices applicable are worked out and
same is intimated to customer along with Turn Around Time (TAT). On
receipt of go-head and acceptance of price intimated by ADL from
customer, the repair work in finally taken up.

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 The System Flow Chart for the activities / interactions involved is
illustrated as follows :
EXPORT MARKETING SYSTEM FLOW CHART
I Supply of Products
A) Technical / Commercial proposal against RFQ / RFP

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Execution of Purchase Order
Supply of Products

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 MAIN OBJECTIVE OF PROJECT

• To prepare the Aircraft / Country Matrix

• To find prospective international customer and country following

parameters were scanned and analysed an the basis of which above
matrix is prepared:

1. ECONOMY : The consideration of economy is done in order to

evaluate the basic nature of economy. For instance a country

having the industrial and mixed economy who may be self
sufficient in manufacturing Aircrafts.

2. RESOURCES : The need for this parameter arose in order to

know the real strength of the country i.e., if a country is rich in any
resource then synergistic relations with the country can be easily
established such as country is rich in oil and gas resources may not
be good enough in other resource such as food products and this
deficiency can be easily overcome by establishing synergy. There
may be a country having poor resources in what we are rich and
the parameter can be considered for delivering the prospective
customers for HAL.
3. INDUSTRY : The nature of Industry of a country can be helpful
in determining the real nature of country and whether there is
scope of business with the country.

45
4. FINANCE AND TRADE : Helps in determining financial
condition of a country, various financial institutions present,
trading policies of country and various trading partners with whom
the country is comfortable with.

5. DEFENCE EXPENDITURE : To know how much a country is

prepared to actually incur on Defence armaments. The more the

percentage of Defence expenditure, the higher the rate of being
prospective Customer.

6. RELATIONSHIP OF COUNTRIES WITH INDIA : This is

most vital ingredient of all parameters. Until or unless the
relationship with other countries are sound enough we cannot
approach them. For example although Pakistan is having all the
Aircrafts range manufactured by HAL but HAL would never like
to supply Aircrafts to Pakistan.

7. THREAT PERCEPTION : this is optional criteria for judging

prospective customers. There are various countries who are having

no threats from any other country like U.S.A. , Oman but still are
having wide range of Aircraft to make themselves powerful
whereas there are some countries who are having threats from
other countries and their purpose of keeping Aircraft is to protect
themselves e.g., India and Pakistan.

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 OBSERVATION

After the analysis it was found out that the Oman is the most
prospective customer for Jaguar (Aircraft) segment with high defence
expenditure of 27.6 % with a very friendly relation with India and therefore
has been rated 1st position. Then comes Ecquador in 2nd position with
enormous economic potential followed by Nigeria and France.

In case of DO-228, Mauritius has been rated 1st because of its good
terms with India, then comes Bhutan followed by other countries.

In Helicopter range that is SA-316 (Cheetah) Argentina stands at the

top followed by Ecquador, Bolovia, Toga, Chile and Peru respectively.

Lastly for other ranges of Aircrafts, U.A.E stands 1st due to its good
trade relations with India followed by Nepal, Dominician Republic, Austria
and Belgium respectively.

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 OBSERVATION

Research Methodology is type of blueprints prepared depending on

objective of the study. A research calls for development the most efficient
plan of gathering the needed information research methodology is the
specification of methods and procedures for acquiring the information
needed to structure or to solve the problems. It is overall pattern of
framework of the project that stipulates what information is to be collected;
from which resources and by what procedures, although research designs
may be classified by many criteria, but the most useful to my project were
exploratory studies. The major of the exploratory research are concerned
with the drawing of inferences that are used as the basis of management
action
Despite the necessity for flexibility, in exploratory study design, we
followed three separate stages that are usually included in exploratory
studies and typically conducted in the sequence listed below:

• 1st Stage : The preliminary data collection has been done from
secondary sources ( books, company, manuals etc).
• 2nd Stage : collection of information from internet and encyclopedia
of various countries for understanding the economy, trade, finance,
relationship with India etc.
• 3rd Stage : Discussions with company officials, participating in
company’s seminar and presentation, interviewing the persons who
are knowledgeable about the subject area being explored.

48
 SWOT ANALYSIS
Strength:

• Reduction of manpower.
• It has 19 production units and 9 research and design centers in 7
locations in India.
• Efficiency of employees is approx.100%.
• Has the monopoly over the market in aircraft maintenance and
manufacturing business in India.
• Is one of the Navratna company.
• It supplies mainly to Indian Defense Services, Coast Guards and
Border Security Forces.
• Being totally government owned company, it gets a lot of benefits
and tax exempted.

Weakness:
• Technology is weak in comparison to other countries.
• No proper work distribution because planning is weak.
• Work place is not cleaned before starting of shifts.
• No facility for entertainment during break time inside the factory.
• Overlapping of shifts due to which there is loss of work.

49
Opportunities
• Proper planning, training, recruitment etc.
• Indigenization of parts.
• The Indian government is asking for technology transfer in all its
deals with HAL being the designated manufacturer of such items.
• HAL’‟s recent accordance to navratna status will give it more
autonomy in functioning which could possibly make HAL into a
success story like ONGC.
• Some of HAL’s indigenous designs like Dhruv and the recently
launched.
• LAH (Light Attack Helicopter) have been received with applause in
the international.
Threats:
• Production suddenly stops due to change in government policy.
• If orders are not completed on time then import from outside.
• Inability to develop new technology may affect its customer base.
• Entry of foreign players.
• Foreign players are entering new joint ventures with local private
companies to enter the market .

50
PRESENTATION OF DATA
ANALYSIS AND FINDINGS

51
 Various countries were scanned on the basis of the factors as
mentioned in the methodology, rank was provided to these countries on the
basis of the factors from 1 to 10,1 being the country highly probable to 10
being the least prospective customer for Hal. But in order to give the rank
weight age chart was prepared in which the maximum parameter of 10 was
allotted to each parameter. The Aircraft wise rating as arrived above is given
below:
RATING OF PROSPECTIVE COUNTRIES
JAGUAR
1. OMAN
2. EQUADOR
3. NIGERIA
4. UNITED KINGDOM
5. FRANCE
DORNIER ( DO-228 )
1. MAURITIUS
2. BHUTAN
3. NIGERIA
4. THAILAND
5. IRAN
6. MALDIVES
7. MALWI
8. GERMANY
9. CAPEVERDE
10. ERITERIA

52
RESEARCH METHODOLOGY:
It was totally based on questionnaire, personal interview, and observation.
The departmental analysis is based on the observation which I made during
period that I have spent during my internship and it is also based on my
personal work that I was asked to work.

SOURCES OF DATA:
The source of data in my project was the employees of HAL. I gather the
information from employees for my project.

METHODS OF DATA COLLECTION:

Primary Data: The primary data has been collected through questionnaire,
personal interview and departmental analysis.
Secondary Data:
1 1. Website of HAL.
2 2. Company monthly journals.
3 3. Training manual on cost reduction provided by HAL.
4 4. Accounting manual and Budget manual provided by HAL.
5 5. Pricing policy of HAL.
TOOLS AND TECHNIQUES OF ANALYSIS:
Data Analysis:
1 1. The introduction of an online website for any company of today’s
world is a boon. Cause growth and expansion will be a promising factor as
the internet makes the world a smaller place to do business. This was
introduced in the year in the year 2000 by HAL.

53
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

BOLIVIA Agriculture Well endowed Mining-70% of Metals and 1.95% of total Satisfactory SA-315B
(S.America) (70%) with Zinc, Tin, F.E. earner, Natural gas are budget
Antimony, food processing leading export
Tungsten and etc. goods. National
abundant source banks and
of energy financial
institutions
provide financial
aids

Bhutan Agriculture, Land locked Free trade with 2% of total Very friendly. DO-228
Assistance by country and has Manufacturing India, 90% of budget Leading trade
India, ADB, transit imports from partner.
UN agreement with India
INDIA

54
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Cape Verde SSIs,Agriculture Less natural Textiles and Fish processing. 7% of total budget Satisfactory DO-228
(W.Africa) earns reveue resources but rely Pharmaceuticals Few Financial
from on fish and institutions
International volcanic rock present.
Airport situated

Chile Agriculture Rich mineral Mining, Fish 30% trade with 3.9% of total Satisfactory SA-315B
deposits.Copper processing, Asian Contries budget
textiles, wood
products

55
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Eriteria Agriculture Gold, Potash, Petroleum & National Bank 6% Satisfactory DO-228
(Africa) (80 %) Iron, Live stock Refinery provides Finance

Germany Advanced Lignite, Coal, Oil & natural Trade with EC 20 % Provide machinery DO-228
(Central economy. Steel. Ships, gas, Steel, members, UN, to India for ALH.
Europe) Tertiary sector chemicals, Electronics Japan, Austria Leading
trade Machinery. Machine prospective
Low natural customer
resources

56
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Greece Least developed Few resources Steel, Bank of Greece 6 % of GDP Satisfactory DO-228
country of EU. mainly Bauxite Alumunium, and other state
Chronic BOP Cements & controlled banks.
problems Textile Trade with
Germany and
Italy

Planned Oil & Natural Machinery & Trade with 3% Provide machinery DO-228
Iran economy, gas transport Western to India for ALH.
Industrial equipments, Europe,Tehran, Leading
economy refining & Japan, Asia prospective
Mineral customer
Industry

57
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Malaysia Diversified and Rubber and Palm Electronic Active financial 7% Trying to Mirage
(S.E. Asia) fast growing oil equipments, sector. Lot of strengthen
appliances, foreign relationship
chemical investment.
products, Major partners
textiles are Japan,
Singapore & S.E.
Asian countries

Millet, Yams, Fishing, Thailand, USA 3% Satisfactory DO-228

Maldives Fishries Melons, tourism, &
Coconut, Fish shipping, Srilanka
coconut
processing

58
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Mauritius Mixed Sugarcane, Tea, Tourism, Rum Large number of 5% Very good DO-228
Tobacco, processing of Indians
Potatoes Sugar & Tea contribute in
trade

Well-off Oil Crude oil Joined WTO. 27.6 % Very good Jaguar
Oman Middle eastern production, Privatization of
economy refineries economy. Low
inflation have
body of
commercial law
to facilitate F.I.

59
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Myanmar Least developed Opium Textile, National banks 3.4 % Very good SA-316
region and Pharmaceuticals look after
agriculture , Oil refinery & financial aspect.
economy Paper mills Imports
machinery &
equipments and
industrial raw
material

Small and Industrial 4.5 % Very good SA-316

Nepal Agriculture Barely Jute, Rice production is
developed small segments.
Depends on
India and have
BOP problem

60
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Renewable and Mining, Central bank

Nigeria Modern Market non-renewable, Cements, helps in 13 % Satisfactory DO-228
(W.Africa) economy Crude oil, natural Textiles, canned providing
gas, coal, Tin food, Aluminum financial
products assistance

Central Reserve
Agriculture, Copper, Iron, Automobiles Bank, National 2.1 % Satisfactory Mirage-
Peru less developed Lead, Zinc, appliances, bank and SA-315B
(S.Amreica) economy Phosphates Steel, Textiles, development
Cement Finance
Corporation.
USA chief
partner of trade

61
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Advanced Mining and National Bank

Economy. Open Phosphates, Quarrying, provides financial
Togo door and non Bauxite, Iron-ore, Petroleum aid. Major
(W.Africa) discriminate and uranium, Gold, refinery, Imports are
encourages Diamond phosphoric acid machinery, 4.6 %
Good SA-315
private investors plants transport and
construction
equipments.
Major partners
are France &
Germany

Imports
Oil refinery transport
U.A.E. - Oil & machinery 40.9 % Regular Customer SA-316
Exploration equipment. of India
U.S., Australia,
Japan are
trading partners

62
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Imports
Petroleum, Food consumer goods,
Equador BOP problems, Petroleum processing, industrial raw - Good Jaguar
Poverty wood products, goods. Banking
chemicals system collapsed

Forest Textile, Main export is

(pine, Oak & Chemical, wine, canned
Portugal Services based Chestnut), coal, Paper, sardines, cork. 6.6 % Satisfactory SA-315B
economy Copper, footwear, Bank of
Titanium Glassware Portugal looks
after finance

63
 AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE DEFENCE RELATIONSHIP A/C

& EXPENDITURE WITH INDIA
FINANCE

Manufacturing,
Thailand Investment Tin Cottage, Bank of Thailand 11.6 % Good Do-228
(S.E. Asia) oriented based Textiles, teak is central bank
on Agriculture. carving.

Main export is
Not enough for Cotton textiles, wine, canned
Malawi Agriculture. commercial use. Canned food sardines, cork. 3% Satisfactory Do-228
stuff. Bank of
Portugal looks
after finance

64
Table 1: showing the improvement of the division on introduction of
a website:

Feedback Percentage
Management level Yes 97%
Labor level No 3%

BAR GRAPH SHOWINGTHE

IMPROVEMENT OF DIVISSION ON
THE INTRODUCTION OF WEBSITE

1.2
Rercentage

1
0.8
Feedback
0.6
Percentage
0.4
0.2
0
Management Labor level
level
Feedback

ANALYSIS: 97% of the workers / employees are aware that the website has helped
the division to improve in its company’s dealings and has helped the company to
progress in the new economy of today’s world.

INFERENCES: The remaining 3% are those workers who are at the lowest cadre of
work who do not have sufficient knowledge about the website of the organization.

1 2. The knowledge about the website should be fair among the people who
work in the organization to conclude that the workers are aware as to where the
company is heading to in the 21st century. HAL being a premier defense industry in
the field of aviation has to always keep up with the other nations and therefore adopt
new technology.

65
Table 2:showing the awareness level of the web by the workers in the
organization:

Response / Levels Management level Labor level

Aware / Yes 98% 87%

Not aware / No 2% 13%

BAR GRAPHSHOWING THEAWARENES LEVELOF

THEWEB BY THEWORKERSIN THEORGANIZATION

100%
80%
60%
40% Aware / Yes
20%
0% Not aware /
Management Labor level No
level
Response v/s level

66
Table 3:representing the customers who respond to the website:

Customers Percentage
Defense customers 85%
Foreign customers 45%
Corporate customers 6%
Civil customers 5%

BARGRAPHSHOWING THE CUSTOMERS

WHO REPONDTO THE WEBSITE

90%
80%
70% Defense
60% customers
50% Foreign
customers
40%
Corporate
30% customers
20% Civil customers
10%
0%
Percentage

67
Table 4: representing the number of customers who respond
voluntarily to the website:

Options Response in percentage

Most of them 30%
All 40%
Few 90%
Very few 70%

90%
80%
70%
60%
Most of them
50%
All
40%
Few
30%
Veryfew
20%
10%
0%
Response in percentage

68
Table 5: showing customers who placed order through net:

Customers who contact Percentage

Defense customers 70%
State government 20%
Corporate customers 7%
Civil customers 3%

70%

60%
Defense customers
50%

40% State government

30% Corporate customers

20%
Civil customers
10%

0%
Percentage

69
Table 6: representing international customers over the web:

Customers In percentage
Many 10%
Few 20%
Very few 5%

20%
18%
16%
14%
12% Many

10% Few
8%
Veryfew
6%
4%
2%
0%
In percentage

70
Table 7: representing importance of customization to customers:

Feedback Response
Very important 90%
Important 80%
To some extent 50%
Not important 5%

90%
80%
70%
Veryimportant
60%
Important
50%
To some extent
40%
30% Not important

20%
10%
0%
Response

71
Table 8: showing the sales of the division for the past 4 years:

Years Sales (in crores)

2001-2002 338.14
2002-2003 328.5
2003-2004 415.14
2004-2005 424.15

450
400
350
300
250 2001-2002
200 2002-2003
150 2003-2004
100
2004-2005
50
0
Sales (in crores)

72
Table 9: showing the profits of the division for last 4 years:

Years Profit (in crores)

2001-2002 46.5
2002-2003 65.9
2003-2004 62.55
2004-2005 51.66

70

60

50
2001-2002
40
2002-2003
30 2003-2004
20 2004-2005

10

0
Profit (in crores)

73
Table 10:showing new prospective customers over net:

Customers Percentage
Civil customers 10%
Corporate customers 15%
State government 20%
Defense customers 100%

74
Table 11: showing reasons for drawbacks in CRM over web:

Reasons for drawbacks Percentage of effect

Delay in reply 20%
Negligence 30%
Failure of system 40%
Other means 10%

40%
35%
30%

25%
Delay in reply
20%
Negligence
15% Failure of system
10% Other means
5%
0%
Percentage of effect

75
 CONCLUSION

HAL is one of the largest PSU under the department of defense production, GOI and

is a “NAVRATNA” company ranked 34th in the list of world’s top 100 defense

companies. HAL with its wide spectrum of expertise in design, development and

manufacture of aircrafts, helicopters, engines, accessories and avionics has emerged

as major aeronautical complex in Asia. As herein, the projects and items need huge

investments than any other organization and confidential factor is also there too much

extent but as much information is extracted shows that cost control is being performed

quite good that’s why it is in so much profit. In the organization, cost of inventory as

well as labor is controlled very well by implementing ABC analysis but there is also

some scope for cost reduction by reducing number of casuals to reduce labor cost and

by implementing EOQ (Economic Order Quantity) technique to control material cost.

Although for the organization’s betterment its executives are working hard and trying

to serve in the best possible manner with their colleagues and they all are very

qualified and experienced so organization must extract optimum from them.

76
 SUGGESTIONS
1. There should be facility of intranet so fax and such other things must be done
through that can reduce time and money.

2. For attendance finger print system should be adopted so that actual person’s
attendance can be mentioned.

3. The following are some of the costs that exist in HAL;

• material cost
• labour cost
• employee cost
• inventory cost
HAL may try and reduce these costs by the following ways;
• Labour cost can be reduced by more use of machinery.
• Salary and appraisal should be given according to the performance of the
employees in order to reduce the employee cost.
• By implementing EOQ.

4. The time delay between rising of purchase order and preparation of RDR
should be reduced.

5. Wages to direct workers should be given through piece rate system.

6. Efficiency of indirect workers should be measured so that slackness can be

sorted out
.
7. Employees should be included in brainstorming and also should be given
liberty and non-monetary incentives as appreciation
.
8. Officers should be promoted only on the basis of performance and not on the
basis of number of years worked
.
9. Workers who have talent and compatible with office grade but restricted to
work only at non-supervisory position, the policy should be such so that grade
promotion could be possible.

10. Profit calculation by project cell for project evaluation is different from
costing section. In this way project evaluation is not proper. So it must
frame its cost- benefit evaluation and focus on only licensing fee and other
DRE and framing of analysis should be done as per actual recoverable profit
percentage.

11. The company should give some stipend to Industry guide for summer
training due to which they will take more interest in providing guidance.

77
12. Should be a separate lecture hall for summer trainees where the industry
guide will come and provide guidance to all trainees.
There

13. It is also suggested that the frequency of meetings with the foreign teams
should be more than presently done. For more the people we meet, the closer
tie will be promoted and this will definitely increase profits.

14. The Company should distribute its brochures – giving the present business
standing, new technologies launched to the overseas customers, this will
develop a kind of confidence in the minds of customers for you, and he will
call you whenever he is in need.

15. More awareness is to be created in the minds of customers whether overseas

or civil, by organized Trade Fairs, Expos, Consumer Fairs at International
level so that more and more customers will come and gain knowledge about
the company, its product and it servicing.

16. The company should find some new overseas customers dealing in the same
business, and must try to offer him the same product that he is making in
comparatively low price (per unit cost), keeping in mind the positive turnover,
this will definitely bound him to purchase the product from the company.

17. The company should try to establish some more Joint Venture relationships
with the foreign companies, dealing in the same business. This will again
make a positive effect on the net sale.

78
ANEXURE

79
 QUESTIONNAIRE

Name:
Designation:
Section / Department:

1 1. Describe the major activities being carried out at the accessories division?
2
3 2. Batch costing and job costing is carried out for which of these activities?
4
5 3. Is there a component costing system in existence?
6
7 4. On what basis is the production work undertaken?
8
9 5. What is your comment on the present budgeting system?
10
11 6. Describe the procedure of processing the cost ledger?
12
13 7. Describe the current practice followed in calculating the cost for various
departments?
14
15 8. Describe the steps taken to improve the international relationship with
foreign companies like Terbomecca and Rolls-Royce?
16
17 9. Is the current computer system capable of tracing the work flow?
18
19 10. Describe the work order structure?
20
21 11. How are the work order issued?

80
 BIBLIOGRAPHY

During the preparation of project I took the help of various sources which are as
follows:

Books

• Budgetary control and standard costing

BY: J.A. Scott

Journals :
1 Accounting manual
2 Budget manual
3 Company monthly journals

Internet :

1 www.hal-india.com
2 www. Wikipedia.com

81