Larsen and ToubroTutor: louw Bezuidenhout
I.D: – 13488947
Larsen and ToubroTutor: louw Bezuidenhout
I.D: – 13488947
This project report description about Larsen & Toubro company. Larsen & Toubro is respected and largest company in INDIA. This company is Founded in 1938 by two Danish engineer. CITATION Lar18 l 16393 (Larsen and Toubro, 2018)Larsen & Toubro focus and continues search the best wold-class quality. This company business has outstanding capability through Engineering, Manufacturing, Technology and constructing. L&T Engineering supplies and manufacture lots of different types of Engineering equipment to procedure in industries such as chemical, oil & gas, chemical and fertilizer and as well as sector such as defence, thermal power plant and nuclear power. This company business operates the technology range and has introducing in the new process of products and manufacturing into the Engineeringly sector. L&T company not only covered Engineering, reassert and development and other world class quality services but also include highly skilled team for future supportable work ethos. CITATION Lar181 l 16393 (Larsen & Toubro, 2018)This summary of Larsen & Toubro will present all complete info around the approach of Larsen & Toubro and their capability in plethora fields. Larsen & Toubro will be empowered, innovative and attaining global targets. This planned is delivered vision into Larsen and Toubro plan, and this statement is delivered around the SWOT.
In 2011, the Larsen & Toubro chairman decided that the company would be divided into nine independent companies. And later the original nine companies were increased subsequently into twelve companies, which is Geo-Structure, Infotech, Water, Smart World & Communication, Hydrocarbon & Chemical, Engineering Services, Power Transmission and Distribution, Finance, Heavy Civil Engineering, Metallurgical & Material Handling, Building & Factories.
In 2018, Larsen and Toubro sell automation and electrical unit to French company and the deal is about $2.1 billion USA dollar. The electric unit makes managements systems, Switchboards etc and delivered Middle East and Europe and the revenue of this division is around 35.9 billion Indian Rupees.
Larsen and Toubro have record achievement in plethora field which is include manufacture world biggest and major coal gasifier in Indian. In 2009, Larsen and Toubro engineering sector design nuclear Submarine, Arihant, and inaugurated in 2009, July. CITATION Wik1 l 16393 (Wikipedia, n.d.)Larsen & Toubro searching better way in Engineering field to meet the emerging challenges. Larsen & Toubro build world largest vacuum pressure chamber for ”International Thermonuclear Experimental Reactor”.
Larsen & Toubro ECC sector (Engineering Construction and Contracts Division) is Largest Construction company in INDIA. According to figure world Larsen & Toubro construction ranks is 47th outside of India and 72th rank in international contract. ECC cover all construction filed such as – Instrumentation, Mechanical, Civil and Electrical.
Larsen & Toubro is India largest Multinational company, committed to customers fulfilment and increase shareholder standards. Larsen & Toubro intended to be empowered team, innovative and established global benchmarks. Larsen & Toubro shall be values of caring, trust and stakeholders. This all are the vision of the Larsen & Toubro Organisation.
Larsen & Toubro ECC has range of service industries: –
Engineering and consultancy.
Structural and civil construction services for all types of industries, building and infrastructural projects.
Mechanical Engineering System which is include, heavy lift erection, fire-fighting, Utility Piping Network, testing and fabrication.
Electrical Engineering System design, telecom projects, control system, automation, electrification etc.
Transmission line, supply and project design.
In 2008, Larsen & Toubro ECC Division divided four self-governing operating company. The operating company are: –
Gulf and Electric Instrumentation Projects.
Infrastructure Operating Company (Metros, nuclear and Defence).
Material Handling, Minerals and Water Operating Company.
Building & Factories Operating Company.
Larsen & Toubro main focusing on construction equipment and mining equipment. Larsen & Toubro- Komatsu is joint venture of Larsen & Toubro. Komatsu LTD established in 1921,Komatsu is the world 2nd largest company for manufacture hydraulic excavators and marketing services. CITATION LTC l 16393 (L&T Construction & Mining Machinery, n.d.) In 1975, plant was started by Larsen & Toubro to manufacture Hydraulic excavators in INDIA for the First time. This company manufacture high pressure Hydraulic component and systems, hydrilla pump, valve blocks, power driver and finally gear boxes. In 2013, Larsen & Toubro purchased 50% stake of Komatsu company and then letter Company name was changed to Larsen & Toubro construction Equipment LTD.
External Environment is the outside examination of Larsen & Toubro, that consist threats and opportunity outside the company. Sometimes the outside factor impacts the business and the organization must react on that factor.
3.1 STEEP ANALYSIS
STEEP (Sociocultural, Technological, Economic, Ecological and Political-legal environment forces) to Larsen & Toubro to scan the area of organization.
3.1.1 Sociocultural: The brand name like Larsen & Toubro play a vital role to attract the customers and buyers to buy products or house and be sure for the best quality work done. That is the one thing Larsen & Toubro realty has as ”Unique Selling Proposition” like Larsen & Toubro green building construction project and all Larsen & Toubro construction projects green certificate.
Social culture is strictly against the resistive attitude of the society and any modern construction resources. And this all because of the safety and security of the society. CITATION Sli16 l 16393 (Slide share, 2016)3.1.2 Technological: Development of latest and new technologies in India, Larsen & Toubro use high end frame work of the technologies in the projects and the skill of Larsen & Toubro engineering construction is process over the decades because of the much years of experience. Against the development of technologies, Indian construction company still more than 10years behind the world wide/global standards. This is going on in Indian company because lack of technologies in the construction can suffers of design and quality in India.
3.1.3 Economic: Indian Government recent grant permission to foreign direct investment and it will help of the growth of the business. Non-Residence Indians have also rights to invest in the real sector like property and housing and this is for people who belong to Indian origin because of FDI (foreign Direct investment) increase the development of town & infrastructure. Investors also buy the share of REIT (Real Estates of investment trust).
3.1.4 Environmental: Environment scanning of Larsen and Toubro in various factors and it can affects the price/cost of the construction such as: –
Cost and the construction Quality of the land and its demand.
Uncertain Environmental Risks.
Transportation/ passage cost.
Lack of availabilities of the labour force.
3.1.5 Political: Larsen & Toubro engineering construction business is one of the largest construction business in INDIA. Make in India campaign is increase the foreign investment and its effects on the real estate’s developments. Engineering construction business gave payments to the state authority of India. Therefore, the construction business is always complimentary for the government.
3.2 Industry Analysis
Construction organisation in Indian market is around US $ 2.6 billion in 2007. The construction company is growing day by day because the large investment is made by the government of India and private sector construction development. Larsen and Toubro landmarks: Industries, airport, flyovers etc.
(Larsen ; Toubro Sustainability programme) CITATION Lar l 16393 (Larsen ; Toubro, n.d.)Larsen ; Toubro focus on the social and environmental responsibilities while doing business. Conserve the safety and natural resources and enhance the sustainable growth.
3.2.1 Industry Structure
India is the largest construction sector and have complete range of construction infrastructure equipment for the different submissions. Some of the categories which is broadly classified: –
Drilling and Tunnelling Equipment.
Road construction equipment.
Equipment of material handling.
3.2.2 Market Size
Investment from foreign is increased in last few years in Indian company. Foreign Direct Investment gradually increase, and Indian construction sector receive direct investment to build township, housing and infrastructure projects. According to Indian department of industrial policy and promotion 2000 to 2017 direct investment in India is around $ 24.67 US dollars. In the infrastructure company is expected to increase by 10% from 2017 US$160 million to US $215million by 2020. CITATION Ind18 l 16393 (Indian Brand Equity Foundation, 2018)3.3 Porter’s Five Forces
Michael porter five forces: CITATION Stu16 l 16393 (Study Moose, 2016)
Threat of New Entrants: (Low) less threat consideration of company nature and reputation of the company and some following reason for low threats:
Scale of economic
High capital requirement
Lack of experience and knowledge
Intensity of labour
Competitive Rivalry: (High) Larsen& Toubro Rivalry is very high because this company is driven by technical abilities. Larsen & Toubro is focusing on the technical, quality of product and projects handling and collaborate with international troupes.
Substitute Products: (Low) Larsen & Toubro company effect when the country developed fully, and risk is low because of the nature of the company. Company look forward for the future International player and towards developing economy.
Bargaining Power of Customers: (Low) Bargaining power of buyers is low. Because of limited number of players less choice in Construction and Engineering sector.
Bargaining power of suppliers: (High) High bargaining suppliers because the construction material is split and most of the Larsen & Toubro construction work is outsources. Supplier have strong high technology segment.
3.4 SWOT Analysis of Larsen & Toubro
Larsen & Toubro is largest field of construction in India. Larsen & Toubro also have variety of ventured into financial services, electrical equipment, information technology and electronic. In the past decades Larsen & Toubro observed very impressively growth in construction and manufacturing. CITATION MBA l 16393 (MBASkool.com, n.d.)Strengths
Solid Brand name: Larsen & Toubro is largest company in India and enhance trust on its customers. Larsen & Toubro is controlled huge projects scale in India and have successfully trustworthy company and which is important in the Engineering Construction Company.
Competitive edge: Larsen and Toubro are India biggest construction company. The company have strong brand name and respected company in engineering field for high quality of system and equipment.
Technical Expertise: Larsen & Toubro have latest technology for support manufacturing and design in the engineering and project management. Larsen & Toubro expertise have huge advantages for the growth of company.
Dependence on Indian Market: Larsen and Toubro mainly depend on the Indian market because the Indian total revenues of market are 65%. Any fluctuation in Indian Market makes the company harmed.
Increase debt: last few years Larsen & Toubro dept and brokerage increased and makes impact company financial flexibility. CITATION MBA l 16393 (MBASkool.com, n.d.)
Construction and Engineering industry growth: Indian construction company increased by 8% in last few years. Government and private organisation invest in the smart cities, metro projects etc.
Strategic joint ventures strengthening business: Larsen & Toubro shaped strategic partnership with UK based design company. This partnership for electronic house for defines and security.
Extensive Environmental Regulation: Larsen & Toubro follow the wide range of environmental guidelines relating to pollution, waste disposal, health etc. These types of compliance affect and cost for the Larsen & Toubro company.
Competition may reduce profitability: Competitors in business have reduce profitability because others company have greater capabilities and resources than Larsen & Toubro.
Low Oil prices affect the industry: due to the decreasing of the oil price, various project has been stopped because of oil price and this affect the growth of the industry and company.