B U S I N E S S S T U D I E S P R E S E N TATI O N T H E F I N O L E X G R O U P

Abstract
Finolex is one of Indias largest conglomerates, it is one of the largest producer of pipes cables and resin in
the country. They have used several aspects and features of their business environment for their
development while others are responsible for their detriment. Factors such as the political atmosphere have
made manufacture more expensive for them, while others have made exports cheaper for them.

Keywords

PEST Analysis

Finolex industries limited (FIL)

American Society for Testing and Materials (ASTM)

Corporate Social Responsibility(CSR)

Diversification and innovation

1. Introduction
Being a leading business conglomerate, the Finolex Group has displayed keen business
intuition and innovation. After a comprehensive, continual study of the demand market,
Finolex has diversified its interests into various fields including Petrochemicals,
telecommunication, irrigation and even education. Their products have been made easily
available through a well-established extensive distribution network.
Since their genesis, in 1957 they have continually been adapting through diversification.
Prahalad and Kishan P Chhabria first diversified from distribution of electric cables to
manufacture of them as well as distribution after receiving a sizable order from the Defence
Department in Pune.
Today the group has a turnover in the excess of 4000 crores, with manufacturing facilities in
11 states. The brand name is synonymous with gold-standard quality.
2 Objectives and methodology
Over the course of making this presentation, both primary and secondary sources of
information were collected. However only secondary sources of information were used.
Secondary sources of information include other research papers, magazines, case studies and
basically whatever we could find on the internet.

2.1 Objectives

The primary objective of this report is to present a SWOT analysis of the Finolex Group. We
have complied this report to factor in the effects of the business environment to show how it
has been used for the development as well as the detriment of the conglomerate.

2.2 Research Methodology

2.2.1 Primary Data Collection
The primary research was collected by approaching the Finolex Group and requesting for
certain statistics.
2.2.2 Secondary data collection
The Secondary data was collected through using magazines, case studies, analyses and
available statistics on the internet.
3 Comparison of Finolex Pipes with competitor Astral Pipes
Finolex pipes with its moto paani ko apni tak pahunechaye is the leading manufacturer of
pipes in India. The Indian P.V.C. is highly competitive. There are various small and large
manufactures in the Indian market. The eastern and southern market are dominated by small
firms manufacturing pipes and P.V.C. products. Finolex main competitors in all India level
are astral poly tech and supreme plastic products .Astral pipes moto is Where innovation
flows. Finolex pipes was incorporated in the year 1981 by M.R.P.P Chabaria. Its first
manufacturing facility was established near Pune. Astral pipes was incorporated in the year
1996.Right now presently Finolex has three manufacturing facilities all over India. Within the
next two years finolex plans to open at least one more manufacturing facility in India to cater
to the growing demand in the country. The present manufacturing facilities of Finolex are
located in Pune, Ratnagiri in Maharashtra and Masar in Gujrat. The Masar plant was mainly
established to cater to the demands of northern India. Astral pipes has plants located in
Dhokla, Santej in Gujrat and one in Hosur Tamil Nadu. Astral pipes recently shut down its
manufacturing plant in Danted in Himachal Pradesh as it became unviable to run. The Hosur
plant was established to gain a stronger foothold in southern India and to compete against the
small manufacturers there who have a combined market share of around 50 percent. Finolex
also plans to open a plant in southern India within the next three years. Finolex pipes has an
annual manufacturing capacity 2, 00, 00,000 metric tons. Within the three years the will be
increasing their manufacturing capacity by around 50,000 metric tons more. Astral pipes
wants to reach a capacity of around 1, 00,000 metric tons more.

4 Analysis of Strengths, Weaknesses, Opportunities and Threats

The analysis has been complied after a thorough analysis of business environment, the results
of this analysis will be delved into before moving onto the SWOT analysis
4.1 PEST Analysis
4.1.1 What is PEST?
A scan of the external macro-environment in which the firm operates can be expressed in
terms of the
following factors:
1. Political
2. Economic
3. Social
4. Technological

4.1.1.1 Political Factors

Political factors include government regulations and legal issues and define both formal and
informal rules under which the firm must operate. Some examples include:
1. Tax policy
2. Employment laws
3. Environmental regulations
4. Trade restrictions and tariffs
5. Political stability
4.1.1.2 Economic Factors
Economic factors affect the purchasing power of potential customers and the firm's cost of
capital. The following are examples of factors in the macroeconomic environment:
1. Economic growth
2. Interest rates
3. Exchange rates
4. Inflation rate
4.1.1.3 Social Factors
Social factors include the demographic and cultural aspects of the external macro
environment. These factors affect customer needs and the size of potential markets. Some
social factors include:
1. Health consciousness
2. Population growth rate
3. Age distribution
4. Career attitudes
5. Emphasis on safety
4.1.1.4 Technological Factors
Technological factors can lower barriers to entry, reduce minimum efficient production
levels, and influence outsourcing decisions. Some technological factors include:

1.
2.
3.
4.

R&D activity
Automation
Technology incentives
Rate of technological change

4.1.2 Why PEST?

Regarding the subject of analysis, the PEST tool can be used to analyse business segments,
industries, particular markets or whole economies. Thus the PEST provides a summary of the
driving forces in the macro environment. It identifies drivers that were of high importance in
the past, indicates to what extend they might change in future and how this will interfere with
the organization or the whole industry. Depending on the objective of the analysis, a
distinction between the current situation and potential future changes may be helpful.
4.1 Strengths
4.1.1

4.1.2

4.1.3

Self Sufficiency
One of the main raw materials required to make pipes is resin, Finolex is the one
of the countrys largest producer of resin. Finolex also generates power for its own
use at manufacturing plants. By producing essential raw materials, they can keep
costs of manufacture down.
Brand Name
Quoting their mission statement, We at Finolex are committed to ensuring
customer satisfaction by offering up quality through systems involving our
customers, vendors and employees. True to their word, through involvement of
the aforementioned parties not only have they delivered products of the highest
quality but have also established a rapport with employees and consumers and
have built a respectable and trustworthy brand.
Distribution network
They have established a widespread national distribution network, making their
products easily available.
4.2 Weaknesses

4.2.1

4.2.2

Advertising
Due to their lack of advertising, their products are less successful outside
Maharashtra. Additionally, their new products take time to become popular in the
market.
Reliance on Imported material
They rely heavily on imported materials.
Their power plants run solely on coal imported from Indonesia, due to
government taxation and the new 2003 Electric Acts regulations, their plants make
significantly lower profits.
They are completely reliant on crude oil and naphtha feedstock as they are the
main raw materials in making PVCs. Crude oil prices increase with the rise in the

dollars value, due to the OPEC agreement. Additionally oil is harvested in

regions with a volatile political scenario, such as the Middle East, South China
Sea, Russia and the Balkans. With the recent political turmoil in Crimea affecting
key oil transport routes and Europe under the threat of freezing over, demand for
oil is high and so are the prices.
The recent Chinese market crash may effect Preferential Trade Agreements, the
volatile scenario has resulted in increasing Naphtha prices
Finolex imports ethylene from Japan, disasters such as the Fukashima Nuclear
Disaster makes ethylene purchases more expensive for them.

4.3 Opportunities
A companys life is not static. There is a constant need to grow and evolve. The corporate
world offers abundance but have to be utilized and a strategic thought process concerning the
same needs to be employed.
There are five major opportunities which could be employed by Finolex Industries in order
to increase growth and as a result, its turnover.
Growing Economy
The economy today, is growing at a fast pace. Industries, especially ones that relate to
housing and development in particular need to keep up with the competition. Land is a finite
resource and that leads to a growing demand for real estate, housing and its many facilities.
This is where the opportunity for Finolex presents itself. This strategic growth in demand
needs to be utilized wisely and can lead to the exponential growth of the business.
Enriching profits by exploring new markets
The world offers a plethora of opportunities for expansion and growth. There are new levels
constantly being achieved in the economies of various countries every day. From a business
perspective, a company confine itself in any manner. Finolex has ample opportunities to tap
into the growth of these developing economies and thus establish their presence in new
markets.
New products and services
By creating new products and introducing new services, a company refers to the basic
organizational principles of reinventing itself and expanding its brand image. Finolex under
this comprehensive SWOT analysis is moving towards this opportunity.
Encapsulating the growing global need for housing facilities
One of the objectives of business is to provide and adapt to the trends of the market. This
principle is enshrined in Finolexs organizational structure.

 Exploring viable and profitable partnership with housing and real estate development
in order to provide facilities on a large scale thus increasing profits
Finolex can move towards exploring beneficial partnerships with developers and thus secure
long term contracts, thus expanding its global presence and brand image.
Opportunities in India
In providing a markets analysis of it can be said that Finolex can utilize the following
opportunities in its business strategy
Utilizing the new governmental schemes of land development and housing reality by 2022
in order to increase turnover
Enabling cost effective production and management in order to provide products and
services that are accessible to various consumer groups etc.

4.4 Threats
Growing competition and as a results decreasing profitability
In the sphere of business, especially in relation to this industry, monopoly is not possible.
Finolex faces this competition and thus, is forced to decrease the prices of its saleable goods
in order to viably compete in the market, thus decreasing profitability.
Inflation of the costs of production and therefore increased product costs
As mentioned earlier, increased product costs reduced the viability of the competitiveness of
the products in the open market. Thus, inflation in the costs of production can prove to be a
major threat to this company.
Technological difficulties will lead to ineffective methods of production
Increased technological advances lead to difficulties in coping with the new methods of
production.

Price fluctuations in the market leads to instability

Instability further leads to a lack of consistency in schemes of profitability.
Premium prices and hence, reduced customer base
Finolex is regarded to be about five to ten percent costlier than the rest of the alternatives
thus severely limiting its consumer base. In order to compete effectively with existing and
emerging alternatives by reducing its costs of production and thus enable a reduction in
overall product price.

5. Acknowledgements
We would like to thank Symbiosis International University and Symbiosis Law
School who gave us this opportunity to this this study. We wish to thank our teacher
Dr. Surya Rashmi Rawat for her constant support and guidance. We affirm that
without her help it would not have been possible to make this presentation.

6. Bibliography
www.Finolex.com
www.Moneycontrol.com
www.forbes.com
www.economictimes.com
www.wikipedia.com
Books referred to
There is no such thing as a self made man