Symphony Vrin Framework

CTC Assignment

Symphony: Beating the heat with its air coolers        Bhavik Leuva   2016PGP093

About the company: Symphony is world’s largest air cooler company. It is selling only one product, Air Coolers. The company operates on an asset light model – they develop its products in-house, but outsource the final assembly to third party plants. The company stated production in 1988, after going for an IPO in 1994, the company diversified into various products and it was a huge failure. The company declared bankruptcy and the stock became a penny stock. They reverted their focus back on the coolers, acquired a company and became giants again. The transition of company through years can be divided into 3 parts. 1. Pre-Diversification era – When the company focused on selling more air coolers and made air cooler a household item. 2. Diversification – When the company tried new businesses like geysers and water coolers 3. Current Status – Where the focus is back on coolers and diversification is in related segments (industrial/large scale coolers).

Analysis - V-VRIN: The company had a skill to convert a commodity, ordinary looking product in a fashionable, lifestyle product by adding design, superior technical performance and features. Their first air cooler cost double than regular cooler, but its looks and superior performance made it a success. They diversified into markets like water heaters and washing machines where they competed with giants. The competitors in this market had deep pockets and large distributor network. When they went into those markets, they tried to do the same thing they did with coolers in these markets, but their valuable resource of making an ordinary product into a lifestyle product, became replicable for their competitors as they could also very easily do the design changes and make their products look good and add more features to it. They also had deep pockets, so they lowered their prices when symphony went in with a value proposition of low price and high features. All those products are not very technically complex and making a design or product change was not a sustainable strategy for symphony as it can be done by anyone. That is why they filed when they tried to diversify their product portfolio.

Now when they focused again only on cooler business, they acquired a Mexican company, International Metal Products Co. The company has huge debts but symphony knew how to turn it around. With this company, they also acquired another skill (resource) of making large, metal coolers. It also gave them access to geographies like USA and Mexico. Now, they started making such industrial coolers and they realized that there is a huge untapped market in India for them, and they can leverage the huge market. This is again a transition from V-VRIN as they acquired a resource and it became valuable and non-substitutable for other companies as this was relatively newer technology for India and acquisition made learning of this technology faster for symphony and made it cost effective.