R U P A K

The Power of Leadership

Presentation on UB Group

Presented By:Rupak Choudhary 10 Nihar Nautiyal 29 Sweta Sharma 45

Shakti Singh 47Suraj Singh 48Puneet Soni 55

The Power of Leadership

PRESENTATION SUMMARY

• INTRODUCTION

• ORGANISATION AND PRODUCTS

• STRATEGIES

• INDUSTRY AND MARKETS

• STRATEGY AND COMPETITORS

• CONCLUSIONS

The Power of Leadership

Introduction•The UB Group was founded by Scottish gentleman Thomas Leishman in 1915.

•The group started manufacturing beer from south Indian based British breweries and elected its first Indian director, Mr. Vittal Mallya in 1947.

•Kingfisher the most visible and modest brand made its entry in 1960.

The Power of Leadership

Contd…

• During the 60’s they added Mc dowell as a subsidiary which helped them to extend its portfolio in to wine & spirits business.

• Latter on Mr. Vittal Mallya acquired UB Group and after his untimely deth in 1983, Mr. Vijay Mallya became the chairman of UB Group.

The Power of Leadership

Mission & Vision• We are focused on assuming leadership in all our

target markets.

• We seek to be the most preferred employer wherever we operate.

• We recognize that our organization is built around people who are our most valuable asset.

• We will always be the partner of choice for customers, suppliers and other creators of innovative concepts.

• We will operate as a decentralized organization and allow each business to develop within our stated values.

• We will be a major contributor to our National Economy and take full advantage of our strong resource base.

The Power of Leadership

Group Business

• Breweries

• Airlines

• Fertilizers

• Engineering

The Power of Leadership

UB GROUPA Group in the process of

TransformationSpirits 29%

Beer8%

Pharma25%

Engineering18%

Others 7%

Petrochemicals6%

Paints 7%

FY 1990

FY 2006

Beer , 17%

Spirits, 59%

Airlines , 6%

Engineering , 3%

Fertilizers, 15%

The Power of Leadership

UB Group- One of India’s leading wealth creators

Market Cap : August 2006• Five Core listed companies have a market cap of USD 1.7 billion

• Market cap has grown 10 times in last 5 years• Some of the large funds who have invested in

McDowell and United Breweries include-

McDowell & Company Ltd

Sloane Robinson LLPGoldman Sachs (Mauritius)Merril Lynch Capital MktsDB Funds (Mauritius)FID Funds (Mauritius) Platinum Asset Mgnt

United Breweries Ltd

Oppenheimer Fund IncCitigroup Global MktsGoldman Sachs (Mauritius)FID Funds (Mauritius)Arisaig Partner (Asia) PteHSBC Financial Services (ME

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Group Holding Structure

(UB City Project)Investments Real Estate

Spirits Business

United Spirits

Shaw Wallace Ltd

BeerBusiness

United Breweries

Millenium Alcobev

Aviation Others

Kingfisher

Airlines Ltd.

Aventis Pharma

Mangalore Chemicals &

Fertilizers

UB Engineering

UB (Holdings) Ltd.

(36.54%)(37.50%)

(50%)

(100%)

(10.28%)

(30.44%)

(34.74%)

(55%)

( Erstwhile McDowell & Co Ltd)

(75%)

The Power of Leadership

UB Group Unique Leadership in both Beer and Spirits

Spirits : Controls about half the domestic market - 60% in first line brands 3rd largest player in the world Has 5 brands which are in the Top 50 Spirits Brands World wide list of Impact International.

Beer : 50% market share nationally Sold in over 52 countries India’s 1st global consumer brand – Kingfisher

Both Beer and Spirits

share a common

distribution channel

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• Strongest brands• Significant

upgradation

• Least vulnerable to policy volatility due to large spread Branding

Local Sourcing

Value Chain

ownership

Segment-Market

Presence

Manufacturing Technology

Beverage Business

Beverage Business

• Optimal, as almost completely locally sourced

• Largest manufacturing base• Maximum capacity utilisation

• Initiatives planned for integration into retailing

The UB Group’s competitive advantage

Management Team

• Professionally managed• Seasoned professionals with

significant industry experience

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Grand Strategies

• Expansion Strategies

Diversification Cooperation (M&A, JV/Foreign

Collaboration)

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Acquisition of Shaw Wallace

Shaw Wallace was the 2nd largest player in spirits in India (MS - 15%).

UB Group acquired 75% stake for a consideration of USD 300 mio in July 2005

Consolidation Plan Action initiated to merge all the spirits

entities into McDowell to create United Spirits Limited.

USL 4

The Power of LeadershipACQ 1

• Largest producer of sparkling wine in Saumur region.

Acquisition of Bouvet Ladubay

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Acquisition of Air Deccan

•The choice is simple.

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Market Share Mar 06

Brand Market Share Mar 06

Indian Beer Market

UBL 2

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COMPANY SWOT ANALYSIS

Strengths

Threats

Weaknesses

Opportunities

Market LeaderStrong Brand ImageGlobal PresenceAggressive AdvertisingQuality & Innovation

Long Development CyclesRelatively Static Market GrowthExpensive Brand Maintenance

Demographic ChangesChanging Societal AttitudesConsumer Brand PreferenceDemand for High Quality

New CompetitorsCloning of Successful brandsIncreasing Buyer PowerGrowth in SubstitutesEconomic Downturn

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MARKET POSITIONING Airlines

Price

Quality

Jet Lite+ Jet

kingfisher

Indian airlines

Spice jet, Go

Deccan

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PORTER’S FIVE FORCES MODEL

Industry Competitors

Strong image, Brand Loyalty, and Innovative R&D.

Potential EntrantsBarrier to entry - customer loyalty, high set-up costs.

BuyersRetailers power

increasing.

SubstitutesRailways for airlines.

SuppliersGlobal

economies of scale keep

suppliers priceslow.

Source: Porter, 1978

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PRODUCT MARKET PORTFOLIO

RMS

MA

RK

ET G

RO

WTH

(%

)

1.0

•Breweries

•Airlines

15%

10%

18%

1.5 0.6

The Power of Leadership

Thank You