Business Case Study: Voltas Come Back

As on 2023, relaunch of the brands, relaunch of the Products and Coming back of the Companies and also experiencing Success, Sustaining Competition, regaining market share is one of the important business trends going on globally. One such firm is the Voltas, a Tata Group company. This specific case study describes the story of Voltas, its come back after a period of close to a decade. After Coming back Voltas gained its position as No.1 in Air Conditioners (ACs) Market with a market share of close to 27%. Also the Turnaround took a five years period involving several efforts, initiatives, innovations, and diversification.

About the Organization: Voltas, a Tata Group Company, is into manufacturing of ACs, Refrigerators, washing machines, air coolers, water coolers, water dispensers, air purifiers, and commercial cooling and heating solutions. They also provide Engineering Solutions and Project Solutions to India, Middle East and South East Asian Markets. Currently they have a Joint Venture with Turkey based Arcelik, with brand name “Voltas Beko”. They have around 25,000 customer touch points across the globe. They also manufacture Textile Machinery, Mining and Construction Equipment. 82% of their revenue comes from domestic market (India); 17% of revenue comes from Middle East and 1% revenues comes from South East Asian Region.

Going Back to History: In 1954, Voltas was Started as a Joint Venture Between Swedish Volkart Brothers and Tata Group to manufacture ACs. During those days because of the regulation limit on number of ACs can be manufactured, Voltas diversified into different segments such as agro-chemicals, moulded furniture, consumer products and industrial equipment. Over 70 years, Voltas partnered with several global players such as Samsung, LG, and Swedish Electrolux. In 1993, Voltas also acquired Hyderabad based Alwyn and manufactured consolidated 500,000 ACs annually. As on 2005, Voltas encountered tough competition from global MNCs operating in India such as Samsung, LG, Electrolux, Hitachi, etc. By FY2007, Voltas lost its market share and encountered financial difficulties.

Survival and Turnaround Strategies: Initially it tried to innovate itself by developing low power consuming ACs with special “Star” ratings. It adopted the “Star” rating not only for ACs but also to other product categories such as Refrigerators, Washing Machines, Water Coolers/Dispensers, etc. Customer touch points were increased from 2,700 to 9,700 in multiple cities. It also specialized its product category in “Window ACs” which was popular northern part of India. It started offering better quality products at competitive price. By 2012, it gained the market share and financially turning the business into profitability.  As on 2023, There were several variants of ACs being developed by Voltas such as Split ACs, Window ACs, Inverter ACs, Tower ACs, etc.

Innovation and Going Further: Several of their efforts include Innovative Supply Chains, Distribution Reach, State-of-the-art R&D facilities, multiple manufacturing plants, lean and flexible supply chains, and continuously innovating product portfolio. They are incorporating Consumer Centricity by adopting multiple tonnages in single product for the purpose of consumer. R&D team is working on innovative technologies such as store fresh technology, gentle wave technology, neo frost dual cooling technology, etc. One more thing is they are understanding the weather conditions of the country and developing products according to the weather conditions. Another initiative is Sales, Marketing and Service are digitised and automated. As on 2023, Voltas is Going ahead with its products and innovations by providing “Comfort & Convenience” to its Consumers. By 2025, India is going to have 10 million ACs in the country.

Thus Organizations, encounter difficult situations because of dynamic economic conditions, technological changes, global competition, changing customer/vendor conditions, availability of raw material, prices of raw material, availability of human resources and costs of human resources. Rigorous efforts, initiatives, and measures can turnaround the situation for a company. While these measures are being taken, maintaining “Cool” is very much important for all the parties involved in the Organization.