7/29/2019 Metal Products India Limited
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METAL PRODUCTS
INDIA LIMITED
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Metal Products India Limited(MPIL)
Metal Products India Limited (MPIL)established in 1987 is one of the leadingmanufacturers of MS (mild steel) metal
sections MS is most commonly used in construction,
furniture, rolling shutters and industrial sheds
The factory is located at Whitefield, on theoutskirts of Bangalore
Set up by parent company Madhya Bharat
Metal Sections Limited (MBMS) in Bhilai
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Case Overview
MPIL was setup for improving the distributionin South
MPIL is losing its market share in NorthKarnataka
Solely dependent on Bangalore Metal Traderfor distribution in Karnataka
New entrants operated with the sub dealers ofMPIL
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Metal Industry
Complete market size of 40,000 metric tones(MT)
Annual growth rate of 6 percent
Major Players
Karnataka Metal Sections (KMS)
Adarsh Metals (AM) Mahavir Metal Sections (MMS)
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Comparison with others
On the basis of product quality
On basis of pricing & discounting
On the basis of distribution & availability On the basis of brand name & reputation of the
company
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Characteristics Of Environment
Previously MPIL was market leader in southIndia
Environment was favorable for MPIL
Business was attractive
New entrants increased the competition
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Distribution Channel of MPIL
MPIL has dealers at all the important locationsin the South
For Karnataka, has only one dealer-BangaloreMetal Traders (BMT) based at Bangalore
Appointed new dealers at Vijayawada, Calicutand Erode
The price to dealers is decided by MPIL
Depending on the volume discount offeredvaried between 3 to 7 %
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Market Structure
Bangalore Metal Traders (BMT) waslargest dealer in South India with offtake of 2000 MT per annum
BMT had more than 50% of marketshare in Karnataka
Transactional Relationship/MutualUnderstanding
MPIL didnt appoint dealers at othercenters in Karnataka
BMT didnt dealt with other
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Market Structure - Contd
Karnataka Metal Sections (KMS)operated Bangalore market throughKavery Agency
More than 80% of market wasshared by MPIL & KMS
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Strategy of new entrants
AM and MMS found it difficult tocompete with BMT and KaveryAgencies, which were well-
established in the market and hadexclusive arrangements with theirprincipals
To penetrate the market, AM andMMS adopted a different strategy ofoffering material direct to customers
in Bangalore
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Present Problems for MPIL
Loosing sub dealers in northKarnataka
Loss in market share new entrantscaptured more than 50% of themarket in Hubli and Belgaum
Strategies adopted by competitorsi.e. new entrants
Discount rate for the sub dealers
Distribution network
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Recommendation
MPIL should not solely depend onBMT
MPIL should promote their productthrough hardware dealers to capturethe market of north Karnataka
Restructuring of discount in interestof sub dealers
Applying condition to deal only withMPIL products
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Problems With SuggestedRecommendations
Might lose business with BMT
Cant offer high margin as AM andMMS
Time constraint in appointing newsub dealers
Cost involved in studying market bynew sub dealers
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THANK YOU
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