A case on Atomberg Technologies

The presentation covers all the details about how Atomberg Technology is changing the Fan market in India through its patented BLDC Technology.

1. Omkar Nandkumar Kate 199278103 Pranjal Garg 199278069 Soumen Kumar Hazra 199278008 Ronit Gaikwad 199278059 Group A7 HEISENBERG MINI-PROJECT

2. Motivation to choose Atomberg Atomberg Technologies started selling its product in the year 2015 In past 5 years it has become one of the recognizable players in the sector of ceiling fans in the premium segment Started with just an employee count of 2 by the founders, Mr. Manoj Meena and Mr. Sibabrata Das, it currently has around 100 employees working at its headquarters in Mumbai It has recently received a funding of $10 M which it is going to majorly invest in R&D It has 1 approved patent and has 6 pending patents. According to the company website it has sold more than 2 lakh fans within the past 5 years It has worked with some reputed business organizations such as Tata Group, ITC, Indian Railways to even education institutions such as IIT Bombay, IIIT Hyderabad etc. which states the positive growth of the company. Despite being a start-up company, Atomberg has a positive EBITDA which is very good.

3. Industry Overview India is a tropical country making fans a necessity. Thus, the fan industry in India is well-established and has shown significant growth over the years. The industry grew at 9% CAGR from FY12-FY17 to reach a size of ~55 million in FY17. Profit realizations increased only 3.0-3.5% annually in the last 2 years due to a parallel rise in raw material prices. However, going forward, realizations for the sector are due to increase substantially as share of premium fans rise from current 6-8% levels to more than 15-20% over the next 3-5 years. 4, 1 60 4, 6 20 5, 1 20 5, 6 90 6, 3 10 7, 00 7, 9 10 8, 9 40 11,420 1 2 ,9 F Y 1 2 F Y 1 3 F Y 1 4 F Y 1 5 F Y 1 6 F Y 1 7 F Y 1 8 F Y 1 9 F Y 2 FY21 FY22 CAGR (FY12-17): 10.97% CAGR (FY 17-22): 13.01% Indian Fan Market Size and Forecast (INR Cr) 10,110

4. Innovations in product aesthetics: Demand for premium fans with better aesthetics has been on the rise over the past 3-5 years with increasing consumer preferences towards enhanced and appealing interiors Energy saving technology: Orient recently introduced a new ceiling fan Ecotech based on Brushless Direct Current Mortor (BLDC) It is a 32W fan which saves 50% power compared to conventional fans that consume 75W. IoT enabled ceiling fans: The smart fans will be connected through the Internet and will automatically adjust speed according to change in temperature. It can be controlled from anywhere through cloud computing. LG plans to launch an IoT enabled fan this year. Trends Rising rural penetration with increased electrification Urban replacement cycle getting shorter due to premiumisation Higher disposable incomes Faster shift to the organized sector Drivers Growth drivers & market trends

5. 7 2 .0% 1 9 .0% 9.0% FY17 Ceiling Fans Table, Wall & P edestal Fans Others (Domestic Exhaust & Industrial) 7 5 .0% 1 5 .0% 1 .0% F Y 22 FY 17 Market Value: INR 7,000 Cr FY 22 Market Value: INR 12,900 Cr Indian Fan Market by Type of Products

6. Orient Electric is increasing its market share with continuous innovations and introducing energy efficient fans which include lesser wear and tear, reduced electromagnetic interference, noiseless operation, improved efficiency, increased reliability, and a longer lifespan. Other major players in the market include Usha, Khaitan, and several unorganized players. Crompton is the leading player in the Indian fans market with its wide distribution network. The company is now focusing more on increasing its share in the high-end product category. Havells is a leading player in the premium fans segment and a well-known brand across various consumer durables. Bajaj Electricals is one of the prominent players in fans, lighting, and luminaires segment where fans contribute to 24% of its revenue. Market Share Analysis

7. With an aim to reduce power consumption and contribute towards a better environment, Atomberg Technologies stepped into the industry in 2015 with very first product, the Atomberg Efficio Ceiling Fan. Their fans endowed with a revolutionary technology were an instant hit, and ever since, they’ve only paved the way for products that are not just energy efficient, but also rich in advanced features. Over the last 4 years, they have launched multiple range of fans and each of them have been given a big thumbs up by the Indian consumer. Introduction

8. BLDC stands for Brushless Direct Current. BLDC motor has no mechanical brush for commutation of the windings. Commutation is deployed with the help of smart electronics. The input voltage provided is 230V AC which is converted to 24V DC by a SMPS. The fan runs internally at 24V and consumes just 28W at full speed. ADVANTAGE Elimination of friction and associated power loss Better flexibility over controlling motor speed No spark and minimal electrical noise as no slip ring or mechanical brushes are used About BLDC –Technology behind Gorilla Fans

9. Product Features

10. Product Features

11. CLIENTELE Clientele

12. Problem Statement Atomberg technologies current focus only on making fans and in that mostly premium segment fans This is because of the technology being used as compared to the technology giants in production of fans such as Orient and Godrej It should focus more on making of the consumer durables which includes all types of electrical appliances BLDC technology for the fans can be used in appliances such as mixer grinders and coolers Might soon fall behind in terms of technology related to home automation since their fans currently do not have those features Should also make the fans more compliant with the latest technologies in IT and home automation

13. Identifying Root Causes for failure of increase in share in the Market. Identifying Base, Key, Pacing & Emerging technologies for the segment. Benchmarking Atomberg with leading industry competitors on : Financials(Revenue) Pricing R&D capabilities Funding Employees Timeline Critical Success Factors - Process Organizational Product Marketing Innovation 13 Approach

14. Benchmarking Revenue Comparison

15. Narrow core competency Focus on only reducing electricity consumption in comparison to competitors by using BLDC motor Huge untouched fields like other home appliances are potential market to grab. Personnel There is lack of skilled talent in the company Scale Environment Automation Core innovation: Brush Less DC Motor Design Thinking Innovation in company is based on causal approach Effective reasoning approach should be implemented Slow implementation of IoT and AI High cost of implementation creates hurdles for mass market entry Cost of technology limits its market to premium segment IoT is not compatible with BLDC motor yet It is not yet implemented in other electrical appliances Tough competition from Crompton greaves, Orient & Bajaj Popularity of home automation rather than less electricity consumption purpose Market is limited as only affluent class can buy it Channels are limited. Focused target group is premium segment Lack of innovation & implementation of new technology. Root Cause Analysis

16. SWOT

17. PEST Analysis POLITICAL FACTORS Government regulation of lowering down energy consumption Boosting the image of India in global market. Certain levels of ambiguity surrounding taxation of electrical products Outsourcing by competitors from China at a low cost ECONOMIC FACTORS Stage of business cycle Exchange rate Inflation

18. PEST Analysis SOCIO CULTURAL FACTORS Education Labour Career TECHNOLOGICAL FACTOR Research spending New Inventions and Development (Changes in) Internet and Mobile Technology Lifecycle & speed of technological obsolescence

19. Arena Staging & Pacing Vehicle Differentiators Atomberg technologies was founded in 2013 and the actual production and selling of the fans started in 2015. The first fan was the Gorilla model which for the first time implemented a patented technology known as BLDC. Today, many of the startups have come up with their very own versions of this BLDC technology including giants such as Crompton and orient. Yet the electrical efficiency and the air flow achieved by Atomberg is still unmatched to the extent that no one could take the electrical consumption below 35 watts where as for Atomberg it is only 28 watts. The technology is a boon and if used properly can be a turning point for the company to produce other consumer durables and also to play a major role in saving the environment. The production capacity of the firm is limited even though the demand is significant. This leads to a profit share lower than the industry average. Also, even though the firm is putting in 70 percent of its funding in research, it should also look at a profit model from the licensing of its patented technologies. Even after having a unique and patented technology, Atomberg only focusses on the ceiling market. Even though currently growing this may come under threat in the future. The current ceiling fan market is very competitive with giants such as Crompton and orient. It will have to provide something unique to increase the customer base. Atomberg is one of the few start-ups who has tapped into a unique market such as ceiling fans. Also, since the technology that it is using is patented, it will have a long run advantage where it the tech. could also be leased out. Apart from that thi would also lead to inhouse consumer durables production capacities. Economic Logic Atomberg brings out its revenue generation by targeting the consumers in the urban areas who can afford the initial high price of the fan. Also since they offer designer fans as well such a Renessa models at a premium price the urban consumers definitely buy it to decorate and match the home interiors. Recently, it has also launched two IoT enabled fans to capture the tech savvy market share. 19 Strategy Diamond

20. Elements of MOT Criteria Technology selection Lack of innovation in motor technology since last 25 years has created a technology gap that can be overcome by superior BLDC Technology that reduces energy consumption by 70% in comparison to previous technologies. New Product Development Atomberg Technology won “Global CleanTech Innovation Program Winner” award by United Nations – 2016 Technology Development Developed & patented the design of BLDC motor for application in ceiling fans and other appliances. Elements of MOT

21. Critical Success Factors Well diversified product line in home appliances like juicer mixer grinders, etc Ensuring all customer queries are solved in a time bound manner Apply the existing Technology in new areas Integrated Solutions Efficient Business Processes Research and development in related & allied areas Customer-Focused Front-Line Organization Flexible and Responsive Back-End Organization Identifying new technology Trends Manage Continuous Change in market

22. VRIO Analysis Resources Value Rarity Inimitability Organized Remarks Product quality Yes Yes No Yes Temporary advantage Cash in hand Yes No No Yes Temporary advantage Ease of use Yes Yes Yes Yes Competitive advantage Excellent supply chain Yes Yes No Yes Temporary advantage Ecosystem integration Yes Yes Yes Yes Competitive advantage Customer loyalty Yes Yes No Yes Temporary advantage Marketing excellence Yes Yes No Yes Temporary advantage

23. Risk Assessment BUSINESS RISK ASSESSMENT Technology obsolescence Market Position Operating Management Profitability Margins Quality of service Sustainable growth Diversification Marketing & Distribution Product accessibility FINANCIAL RISK ASSESSMENT Financial Policy Capital Structure Leverage Liabilities Cash Flow Protection And Liquidity Debt-servicing capability Financial Flexibility

24. Recommendations Atomberg Technologies has a very good idea but it needs to be scaled up to make a significant impact on profitability. It should make transition from being a domestic manufacturer to being an international company. Atomberg Technologies is facing a lot of competition from local and domestic manufacturers of electric fans. It should go for strategic partnerships with national and international companies so that it can survive tough competition. Atomberg is currently dependent on a single product viz. BLDC electric fans, whose technology is rapidly being adopted by its competitors. It should diversify its products to reduce this risk. High investment in R&D along with hiring skilled talent should aid in bringing new ideas and innovations necessary to sustain the growth.

25. Understanding the possible future problems in scaling up the idea Threats from cheap Chinese imports Threats from Indian as well as international competitors Limited target population segment causing slow growth Need for better marketing to increase sales Need for economic pricing to include value segment Learnings from Expert interaction

26. References https://www.bijlibachao.com/ https://www.telegraphindia.com/ https://atomberg.com/ https://www.motioncontrolonline.org/ https://www.linkedin.com/ https://www.getit.in/ https://www.intechopen.com/ http://web.mit.edu/

27. Thank You