BHEL: Losing out to Chinese Rivals?


Code : COM0263

Year :

Industry : Power

Region : USA

Teaching Note:Not Available

Structured Assignment :Not Available

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Abstract: In 2011, Bharat Heavy Electricals Limited (BHEL), an integrated power plant equipment manufacturer and the 12th largest power equipment manufacturer in the world, faced stiff competition from Chinese power equipment players. The Chinese players, who had had little or no presence a few decades ago, had taken away a 50% market share from BHEL in 2011. But BHEL had still been earning profits continuously since 1971-72. However, analysts pointed out lot of weaknesses in BHEL like capacity constraints, outdated technology, improper capacity management, etc. despite its strengths like quality and customized equipment manufacturing capability and operating efficiency, etc. as compared to the Chinese players. In addition, Indian power companies’ struggle to get finance for their projects helped Chinese companies to gain a strong foothold in India. So, BHEL started losing to Chinese rivals from the year 2000. BHEL initiated a few strategies like setting up a finance subsidiary, increasing capacity, introducing new product variants, etc. to beat the competition. But experts wondered whether BHEL would be able to successfully meet the competition from Chinese players or whether it would lose its momentum of growth in the future.

Pedagogical Objectives:

  • Discuss the growth of BHEL as the largest equipment manufacturer in India

  • Elucidate how the competition evolved in the Indian power equipment manufacturing market

  • Discuss the critical success factors for a power equipment manufacturer and whether these factors need to be localized

  • Discuss how Chinese players were able to achieve significant growth against strong BHEL and why BHEL, otherwise the leading player in India, was losing out to the Chinese players

  • Analyze the strategies of BHEL to tackle the competition from the Chinese players.

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    Keywords : Bharat Heavy Electricals Limited (BHEL), Competitive Strategies, Competition , Competitive Advantage, China, BHELvs China, Power Plant Equipment, Capacity Management, Monopoly , Market Share, Shanghai Electric Group, Donga Fang Electric, Critical Success Factors

    Contents :
    » About BHEL
    » Increasing Threat from Rivals
    » BHEL vs Chinise Players

    Case Introduction >>

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