SUMMER INTERNSHIP PROJECT REPORT AT HALMA India Pvt. Ltd. A Project Report Submitted In Partial Fulfillment of the Requirements For The Award of the POST GRADUATE DIPLOMA IN MANAGEMENT TO M.S.RAMAIAH INSTITUTE OF MANAGEMENT BY HEMANTH KUMAR MEDA REG.NO. 151228 BATCH 2015-17 Under the guidance of Prof. ARUL JYOTHI M.S.RAMAIAH INSTITUTE OF MANAGEMENT NEW BEL ROAD, BANGALORE-560054 July 2016
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SUMMER INTERNSHIP PROJECT REPORT
AT
HALMA India Pvt. Ltd.
A Project Report Submitted In Partial Fulfillment of the Requirements
For The Award of the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
M.S.RAMAIAH INSTITUTE OF MANAGEMENT
BY
HEMANTH KUMAR MEDA
REG.NO. 151228
BATCH 2015-17
Under the guidance of
Prof. ARUL JYOTHI
M.S.RAMAIAH INSTITUTE OF MANAGEMENT
NEW BEL ROAD, BANGALORE-560054
July 2016
CERTIFICATE
This is to certify that the Project Report undertaken by Hemanth Kumar Meda,
Reg. No. 151228 conducted at HALMA India Pvt. Ltd. Submitted in partial
fulfillment of the requirements for the award of the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
M.S.RAMAIAH INSTITUTE OF MANAGEMENT
Is a record of bonafide internship carried out under my supervision and guidance.
He/She has attended the required guidance sessions held. This report has not
been submitted for the award of any other degree/diploma/fellowship or similar
titles or prizes.
Guide’s Signature:
Name: Prof. Arul Jyothi
Qualification: MBA, M Phil.
STUDENT’S DECLARATION
I hereby declare that the Project Report conducted at HALMA India Pvt. Ltd. Under
the guidance of Prof. Arul Jyothi.
Submitted in Partial fulfillment of the requirements for the
POST GRADUATE DIPLOMA IN MANAGEMENT
TO
M.S.RAMAIAH INSTITUTE OF MANAGEMENT
is my original work and the same has not been submitted for the award of any other
Degree/Diploma/Fellowship or other similar titles or prizes
Signature of the Student
Place: Bangalore HEMANTH KUMAR MEDA
Date: Reg. No.:151228
ACKNOWLEDGEMENT
I extend my special gratitude to our Dean Dr.H.Muralidharan, Academic Head
Prof. V. Narayanan & Programme Head Dr. Savitha Rani Ramachandran for
inspiring me to take up this project and also for their able guidance and support
in completing this internship.
I wish to acknowledge my sincere gratitude and indebtedness to my project
guide Prof. Arul Jyothi of M.S. RAMAIAH INSTITUTE OF MANAGEMENT
Bangalore for his/her valuable guidance and constructive suggestions in the
India Electronic Security Industry Potential to 2020 - Growing System Integrators Market with
Real Estate Development in Upcoming Smart Cities" provides a comprehensive analysis of
electronic security market in India. The report focuses on the electronic security products sales and
solutions revenue by system integrators separately in detail. It covers market size and segmentation
of overall electronic security market by verticals (i.e. Video Surveillance - CCTV, Fire Detection,
Access Control, Intrusion Alarm and Specialty devices), by end users (residential and non-
residential - commercial, government, hospitality, transportation, education and others), by
organized and unorganized and by domestic and foreign companies operating in the sector.
Marketing research is about links the producers, customers, and end users. Collected information
used to identify and define marketing opportunities and problems, improve, and evaluate
marketing actions, monitor marketing performance, and improve understanding of marketing as a
process. This research specifies the data required to address these issues, designs the method for
collecting information, manages the data collection process, analyzes the results, and
communicates the findings and their implications.
This study contributes to understanding the architect, security consultant (Integrator) and Builder
and their role in premium residential projects, understand the challenges faced by them, factors
which are affecting the buying behavior of the customer towards intrusion alarm. Texecom under
the umbrella of HALMA group. How it penetrate in the premium residential market.
Chapter 1
Industry Profile
Introduction: India Electronic Security Industry Potential to 2020 - Growing System Integrators
Market with Real Estate Development in Upcoming Smart Cities" provides a comprehensive
analysis of electronic security market in India. The report focuses on the electronic security
products sales and solutions revenue by system integrators separately in detail. It covers market
size and segmentation of overall electronic security market by verticals (i.e. Video Surveillance -
CCTV, Fire Detection, Access Control, Intrusion Alarm and Specialty devices), by end users
(residential and non-residential - commercial, hospitality, transportation, education and others), by
organized and unorganized and by domestic and foreign companies operating in the sector.
Intrusion Prevention Systems (IPS) is a network safety technology that examines network traffic
flow to detect and prevent any malicious intrusions. Growing criminal attacks, as well as in-house
and external unethical practices, are projected to be the key aspects that lift the global intrusion
prevention system market. Growing trend of office & home security system automation is also
projected to raise the market demand. Increasing tablet and Smartphone proliferation has resulted
in increased mobility, which is also projected to boost the industry growth. In addition, increasing
disposable income, in various developed as well as developing nations, is also said to be the major
demand driving factor.
Safety has been a major concern in many sectors such as industrial commercial and residential
areas. Growing implementation of new technology in these sectors is also projected to help boost
the industry growth. Advancements in the semiconductor technology such as Liquid Crystal
Displays (LEDs) and photodiode may also boost the market growth. The advent of cable provider
& prominent telecommunication is also projected to maximize the penetration rate in the near
future.
Integration of various detection systems with intrusion prevention systems has automated various
protective measures, such as notifying police, may also help in the industry growth. Technologies
such as Biometrics provide fingerprints, palm veins, face recognition etc. and integration with such
authentication system may help fulfill the high safety needs of certain industries helping the future
market growth.
An introduction of video-based and an increase in sensitive touch-based intrusion detection
systems are also projected to boost the market demand. Increasing demand across the Banking,
Financial Services & Insurance (BFSI) sector, so as to safeguard the stored valuables, is also said
to be the major factor boosting the market growth.
All these aspects have helped boost the intrusion prevention systems market and it is projected to
grow from $2.7 billion in 2014 to $5.4 billion in 2019 with a CAG rate of 13.3%.
High safety awareness in the developed areas, such North America, may result in extensive growth.
Asia-Pacific region is said to exhibit a high growth due to increased burglary rate and consumer
disposable income. The Middle East & Africa region is also expected to witness tremendous
growth due to increasing investment in infrastructure as well as the development of data center by
major IT companies.
Page 1
1.1 Economic Reforms: The reforms launched in the early 90’s have made India an attractive place for investment. Custom
duties have been lowered, repatriation of profits made liberal and levels of foreign equity raised
considerably, (even 100 percent in case of export oriented industries). Emerging as an across the
board low cost base, the country has been found to be attractive enough to multinationals to
relocate here. More than one hundred of the Fortune 500 companies now have a presence in India.
Guidelines developed by the government in specific sectors such as Telecom, Ports, Airports,
Railways, Roads, Energy and Construction Development have been done with a view to improving
competitiveness of the Indian economy. A Special Economic Zone (SEZ) Act has also been put in
Place to facilitate this process. In 1991, when the reforms were started, India’s Forex reserves were
just US$ 2B. Today they are breaching the US$ 200B mark. The writing on the wall is very clear
- “NOBODY CAN AFFORD NOT TO ENGAGE INDIA!”
The Services Sector: The huge private manned guarding sector, estimated to comprise of more than 5,000 guard
companies employing more than 1 Million people, remains unregulated. It by and large dominates
the protection industry in India. Born in the 60’s this sector started with a handful of large players.
Today, companies like G4S, SIS, Tops, SDB CISCO, Peregrine, and Checkmate, Premier, GI
Security and some others operate through their various regional and city offices to offer protection
services nationwide. However, smaller companies dotting the landscape, in a bid to carve out a
share of the market, resort to cost-cutting, which in turn brings down the quality of service
provided. Large players, on the other hand, provide in-house training facilities, job orientation
programs which reflect in the quality of service they provide. Interestingly, the concept of Central
Monitoring Services (CMS) of alarms has not really caught on in India, as the end-user expects a
private response rather than a police or a state response. As of now, there are less than 5 companies
offering CMS and Response services, the majority of them, including G4S having started such
services in the last couple of years. The reason for the poor growth of this sector is not hard to find.
As Mr. Suresh Sawhney, the Vice President & Country Head of Ingersoll-Rand International
(India) puts it, “Inherently the Indian society is not crime prone. The general population does not
perceive this to be a threat area as also the fact that the education level of the decision makers
about security systems is low. This would change in the next 5 – 10 years.” In a bid to regulate the
manned guarding sector, the Indian Government recently passed the 2005 Private Security
Agencies Regulation Act which, in reality, is yet to take off.
The Systems Sector: The height of terrorism in the 70’s saw the birth of the systems sector with nondescript Bank Alarm
manufacturers and installers trying to outdo each other with substandard, locally-assembled
alarms. Import liberalization in the mid 80’s saw the emergence of System Integrators (SI), with
rapid acceleration in the 90’s. While most systems worth the name were imported, indigenously
assembled systems in those days too were largely import based. Further trade liberalization
resulted in the influx of global players like Honeywell, GE, BOSCH, Tyco, Siemens and HID.
Othe international companies are making their presence felt by appointing distributors, and more
recently, opening their Indian offices and offering sales and after-sales support. Large government
and infrastructure security system projects are beginning to happen as end users realize the
advantages of electronic protection.
Page 2
1.2 The Indian Electronic Protection Systems Industry The Indian market for electronic security equipment is categorized into the electronic sector and
non-electronic sectors and organized and informal sectors. While the total number of players in
the organized electronic sector is around 50, the unorganized sector accounts for about 800 units.
Many Indian companies have collaborated with foreign manufacturers and are marketing foreign
products in India. Security equipment is imported mainly from USA, UK, Germany, Singapore,
Italy, Hong Kong, Israel, Japan, Korea, China, and Taiwan.
1. 3 Some Major Brands in India As far as CCTV equipment is concerned, companies like Bosch, Honeywell, GE, Pelco, Samsung,
Yoko, Meritt Lilin, Hanse, Hi Sharp, CBC, Sanyo, American Dynamics, Vicon and more recently
Sony, Axis, DVTel, and Verint control the major portion of the market. The Access Control market
is dominated by players like HID, Europlex, Cardax, GE (Casi Rusco), Lenel, Syris, Poris,
Pegasus, Elid, IDTEK, Tyco (Sensormatic), JCI (Card Key) Solus, MBux and Kantech. The
relatively much smaller Intrusion detection systems market is catered to by names like Jablotron,
GE (Caddx), Tyco (DSC), Securico, Texecom, Magal, Senstar Stellar and Gallagher. While this
list is purely indicative, there is definitely room for more players to come in.
How business gets transacted? The manufacturer typically sells to the distributor, who usually is also a system integrator
(although recently a few pure distributors such as ADI (Honeywell) have emerged). The distributor
markets the products to other SI’s, installers and end-users, does sales promotion, renders technical
assistance and after sales & warranty services on behalf of the manufacturer. The distributor at
times also sells components that are part of an overall security system to Original Equipment
Manufacturers who further sell to installers and end-users. Recently some local and off-shore
(Hong Kong & Singapore based) traders have entered the scenario.
Fig 1 Distribution Model Page 3
These entities typically source, supply and often finance the transaction between the manufacturer
and the distributor. With the market expanding and looking more promising, a more recent trend
has been for manufacturers to establish their wholly owned subsidiary and open local office/s. The
Staff employed by them does product promotion with the System Integrators, Consultants,
Specifies and End-Users. Amongst the multinational brands, perhaps Honeywell has the best
broad-based and structured set-up in India. It has a software development center in Bangalore
serving its global needs, a systems integration unit (Honeywell Building Solutions) in Pune, a
dedicated distribution unit in Gurgaon (selling to big SI’s for large and middle level projects), a
general distribution unit (ADI), located on Gurgaon, Mumbai & Bangalore, selling to small and
medium level independent installers and a manufacturing unit in Gurgaon producing fire alarm
systems.
1.2 Major Market Areas While North India (Delhi, NCR, Haryana, Punjab, part Uttranchal & West UP, NE Rajasthan),
have the largest proportion on security installations, the Southern India (Hyderabad, Bangalore,
Chennai, Coimbatore, Mangalore, Trivandrum) are a close second. Western parts of the country
(East Gujarat, Mumbai, Goa, Maharashtra) follows next with the Eastern part of the country being
somewhat deprived of the security cover it demands.
Fig 2 Market areas
Page 4
1.3 Market Assessments As no coordinated, structured and research-based assessment has yet been made about the status
and the girth of the Indian Protection Systems Industry, the results of a mini-survey conducted
recently by Security Today give a fairly good indication of the size of the major market areas.
Estimated at USD 350 million, the systems sector in India can broadly be divided into five
categories. The largest amongst these is the CCTV segment, commanding some 55 percent of the
entire market. With the high-success rate of CCTV surveillance equipment worldwide, security
conscious organizations (both government and non-government) in India are setting aside budgets
for implementing CCTV surveillance, reflecting an annual expected growth rate of around 45
percent.
Fig 3 Market assessments
The market of fixed Dome type cameras is nearly 4 times that of Box type ‘C/CS’ mount cameras.
Acceptance of Speed Dome cameras is fast increasing as costs get reduced. Access Control
systems account for about 30 percent of the market share. While access regulation is definitely
very desirable, the cost factor restricts the installation of good access controls systems to only large
organizations. Unlike the rest of the world, Intrusion Detection Systems have not found a very
good market in India, presumably due to lack of awareness as well as education. The majority of
installations are purely residential.
Page 5
Table 1 – product sector, market size and growth
Growth Drivers
As mentioned before, economic liberalization and development has been, and continues to be the
largest single factor contributing to the growth of the security systems industry, with the falling of
prices of electronic systems worldwide coming in a close second. Compared to the prohibitive
250% Import Customs Duty of the 80’s, the current rate of 35% is also be considered as growth
driver for the industry. Rapid growth in sectors such as telecom, ports, airports, aviation, railways,
roads, energy, construction and retail, coupled with the influx of multinational companies also
contributed to a large extent. Furthermore, increased Government allocations to modernize Police
services witnessed the recent setting up of city surveillance projects in almost all the metros. What
is needed? To ensure a healthy growth, “The security industry must follow some quality
certifications. While standards should be formulated for equipment, suppliers and installers should
be certified as per their performance and professionalism,” says Mr. Mann. “The market is in a
mess,” says Mr. Sawhney. “If it is to improve to attain an industry status, the crying need is for
self-realization and commencement of accreditation programmer sponsored within the industry by
brand leaders like Ingersoll-Rand, Honeywell, GE, Tyco, etc., to bring the skills and maturity
levels to world standards,” he hastens to add.
Page 6
Future Trends Trend towards one-stop shopping in the commercial and industrial markets as customers seek
to decrease their systems integration costs
Move from Analog to Digital
IP Based systems gaining ground. Players such as Axis, Sony, Verint, DVTel, Lenel increasing
awareness
Convergence of IT and Physical Security
Arrival of IT network players such as CISCO and D-Link. into the security systems arena
Intelligent Facility Management Systems
Emergence of Security Industry Publications.
More Exhibitions and Seminars
Industry Associations getting professionally active
1.4 POTERS FIVE FORCE MODEL IN INTRUSION SECTOR:
The Five Forces model of Porter is an outside-in business unit strategy tool that is used to make
an analysis of the attractiveness (value...) of an industry structure. It captures the key elements of
industry competition
Porter’s Five Forces are designed for traditional for-profit commerce and industry scenarios.
Which equally applicable to the Electronic Security Industry; an examination of these will
highlight the implicit vulnerabilities of organisations working in this sector. Where Porter’s model
looks at the way the forces can affect profit, the Electronic Security Industry adaptation of his
model is more concerned with how the forces impact an organisation’s ability to perform its
mission effectively and efficiently.
Fig 4 - Porter’s Five Force Model
Page 7
Porter’s Five Forces are:
1. The power of large customers
2. The power of large suppliers
3. The level of rivalry among organizations in an industry
4. The potential for entry into the industry
5. The threat of substitute products
The significance of each of these will be individually engaged in a general discussion of the
Electronic Security Industry. This discussion will close with the presentation of an Electronic
Security Industry adaptation of Porter’s Five Forces model.
Fig 5 - Porter’s Five Force
Threat of New Entrants • Economies of Scale
• Product Differentiation
• Capital Requirements
• Customer Switching Costs
• Access to Distribution Channels
• Government Policy
• Expected Retaliation Page 8
Power of Suppliers
Suppliers exert power in the industry by: Threatening to raise, prices or to reduce quality, Powerful
suppliers can squeeze industry profitability if firms are unable to recover cost increases
Suppliers are likely to be powerful if: • Supplier industry is dominated by a few firms
• Suppliers’ products have few substitutes
• Buyer is not an important customer to supplier
• Suppliers’ product is an important input to buyers’ product
• Suppliers’ products are differentiated
• Suppliers’ products have high switching costs
Power of Buyers Buyers compete with the supplying industry by: Bargaining down prices, Forcing higher quality,
playing firms off of each other
Buyer groups are likely to be powerful if: • Buyers are concentrated
• Purchase accounts for a significant fraction of supplier’s sales
• Products are undifferentiated
• Buyers face few switching costs
• Buyer presents a credible threat of backward integration
• Buyer has full information
Threat of Substitute Products
• Products with similar function limit the prices firms can charge
• Keys to evaluate substitute products: Products with improving price/performance tradeoffs
relative to present industry products
Example:
• Electronic security systems in place of security guards
Rivalry among Existing Competitors
Intense rivalry often plays out in the following ways:
• Using price competition
• Staging advertising battles
• Increasing consumer warranties or service
• Making new product introductions
Page 9
Occurs when a firm is pressured or sees an opportunity:
• Price competition often leaves the entire industry worse off
• Advertising battles may increase total industry demand, but may be costly to smaller
competitors
Competitive Advantage • The Competitive Advantage model of Porter learns that competitive strategy is about taking
offensive or defensive action to create a defendable position in an industry, in order to cope
successfully with competitive forces.
• Companies can combat the pressure of the five forces and create competitive advantages.
• There are 2 basics types of Competitive Advantage :
1. Cost leadership (low cost)
2. Differentiation
Strengths of five forces model: • The model is strong tool for competitive analysis at industry level.
• It provides useful input for performing a SWOT analysis.
Page 10
Chapter II
Company Profile
2.1 Introduction:
Halma is a leading international safety, health and environmental group. Its wholly owned but
independently run companies offer advanced technology in specialised areas. These companies
make products for:
Fig 6
Halma companies make products that provide innovative solutions for many of the key problems
facing the world today. We are a remarkable success story. Without realising it, you will encounter
our products daily. We have nearly 50 businesses in 23 countries and major operations in Europe,
the USA and Asia.
At a Glance A FTSE 250 company quoted on the London Stock Exchange
Founded in 1894
Headquarters near London, United Kingdom
Around 5600 employees worldwide
Customers in 160 countries
Revenues of over £807.8 million in 2015/16
≥5% dividend growth for 35+ years
History:
Halma’s origins began in Asia in 1894. As The Nahalma Tea Estate Company Limited, it operated
in Ceylon (renamed Sri Lanka in 1972). The company later switched to rubber production and in
1937 became the Nahalma Rubber Estate Company Limited.
During the 1950s the Sri-Lankan government nationalized many of the island’s businesses,
including the rubber industry. In 1956 the Nahalma Rubber Estate Company Limited became
Halma Investments Limited. The company ended its connections with rubber and its role changed
to an investment management and industrial holding company.
Page 11
Halma was listed on the London Stock Exchange in January 1972 and became a publicly-traded
company. A series of acquisitions was made of mechanical, electrical and electronic engineering
companies and successful management generated strong organic growth. This created the basis for
the international manufacturing group that Halma is today. The company changed its name to
Halma Limited in 1973 and registered as a public limited company in 1981, becoming Halma plc.
Halma has grown to be an established FTSE 250 business and currently comprises nearly 50
subsidiary companies operating worldwide. Today, Halma’s technology centres on sensors, its
markets are primarily the protection of human and capital assets, and the Group continues to grow
through organic expansion and acquisition.
Halma Business :
Halma’s business is about protecting life and improving the quality of life for people worldwide.
Halma products provide innovative solutions for many of the key problems facing the world today.
Halma’s four specialist business sectors are:
Process safety Products which protect assets and people at work. Specialized interlocks which safely control
critical processes. Instruments which detect flammable and hazardous gases. Explosion protection
and corrosion monitoring products.
Infrastructure safety Products which detect hazards to protect assets and people in public spaces and commercial
buildings. Fire and smoke detectors, fire detection systems, security sensors and audible/visual
warning devices. Sensors used on automatic doors and elevators in buildings and transportation.
Medical Products used to improve personal and public health. Devices used to assess eye health, assist with
eye surgery and primary care applications. Fluidic components such as pumps, probes, valves and
connectors used by medical diagnostic OEMs.
Environmental & Analysis Products and technologies for analysis in safety, life sciences and environmental markets. Market-
leading opto-electronic technology and gas conditioning products. Products to monitor water
networks, UV technology for disinfecting water, and water quality testing products.
These four operating sectors offer
relatively non-cyclical markets
sustained growth underpinned by strong, resilient drivers
significant barriers to entry for potential competitors
Page 12
2.2 Organization Structure: Halma has a highly decentralised structure which delivers real competitive advantage. Halma
places its operational resources close to the customers through locally-managed, autonomous
businesses.
Halma Operating companies Operating companies have their own board of directors and are given considerable freedom for
entrepreneurial action. Research and development, manufacturing, sales and marketing, and
human resources are all managed at operating company level.
Halma subsidiary boards are empowered to make timely decisions in the best interests of their
business. With an intimate knowledge of their market dynamics and customer needs they are best
placed to make local resource allocation decisions swiftly in response to market changes.
Halma Sectors
Halma’s subsidiary companies are grouped into four operating Sectors: Process Safety,
Infrastructure Safety, Medical and Environmental & Analysis. Each sector is an autonomous
business unit responsible for its own growth organically and by acquisition.
Sectors are managed by Sector Chief Executives and Sector Vice Presidents who are Chairmen of
the subsidiaries. Their primary role is to provide insight, inspiration and leadership for the local
management boards. Sector Chief Executives understand the market needs of their companies and
contribute broadly to their strategies. They set objectives and targets, measure performance and
incentivise their managements.
Sector Chief Executives are also responsible for acquiring new businesses and the recruitment of
high calibre managers to run our companies. Sector Chief Executives are members of the Halma
Executive Board and through regular interaction between Executive Board members, common
challenges and opportunities are identified.
Head office A small head office team focuses on corporate strategy and maintains an overall framework of
financial planning, reporting and control. Head office also provides a limited range of central
financial services, including treasury, pensions, insurances and share plans, and leads Group
strategic initiatives such as driving improvements in sales processes, innovation and people
development.
Values:
Halma values help to ensure a consistent set of standards and behaviours throughout the Group.
This is particularly important given the Group’s decentralised structure.