Polycab Business Model

Polycab India Ltd. was incorporated in the year 1996 and today, it is one of the leading and the largest wire and cable companies in India. The company at present has 24 manufacturing units in India and majorly deals in wires, cables, and Fast-Moving Electrical Goods (FMEG). In its manufacturing units, Polycab manufactures copper wire rods, aluminum and aluminum rods, several grades of PVC, GI wires and strips, and XLPE compounds. With a wide distribution network of 3300 distributors and dealers and more than 10,000 retail outlets in India, the company focuses on a business model that enables it to meet the needs of its customers.Polycab

Business Model

Polycab adopts both B2C and B2B business models, where it gets almost 35% share from the B2C segment and 65% share from the B2B segment. The B2B or business to business model is mainly focused on supplying the manufactured products to businesses or institutions on a big scale. The institutional clients of Polycab include ACC, Adani Wilmar, Ambuja Cement, Gujarat Energy Transmission Corporation, Tata Steel, Reliance Industries, etc. The B2C model or Business to Consumer model enables Polycab to sell directly to the consumers. The company aims at increasing the B2C share from 35% to 50%.

Business Model of Polycab

The company is also based on organic growth and the forward and backward integration model. Polycab is domestically focused and only 5% of its revenues are accounted by exports. To expand its operations successfully in the country, Polycab established 3 subsidiaries and 2 joint ventures. The 3 subsidiaries of the company are:

  • Dowells Cable Accessories Private Limited: Setup in 2015 in which the Company holds 51% stake.
  • Tirupati Reels Private Limited: Setup in 2015 in which Polycab India Ltd holds 55% stake.
  • Polycab Wires Italy SRL: Setup in 2012 and is wholly (100%) owned.

The joint ventures of Polycab were with Ryker Base Pvt. Ltd. and Techno Electromech Pvt. Ltd. The JV with Ryker Base was formed in 2016 and in 2020, Polycab acquired the remaining 50% share in the company to make it a wholly-owned subsidiary. With Techno Electrmoech, Polycab has a 50:50 joint venture.

Polycab Business ModelDiversification is another business strategy followed by Polycab to succeed in the business. The company started diversification of its products in 2009. The company diversified into engineering, procurement, and construction (EPC) business that involves the design, engineering, supply, execution, and commissioning of power distribution and rural electrification projects. In its diversified business, Polycab takes up projects where the use of its end-products is involved.

A flexible pricing model also helps Polycab to enjoy good profits. However, when it is B2B customers, changing prices is not easy, but for B2C, the prices can be flexible enough to help the company enjoy economies of scale.

The business model and strategies followed by Polycab enable the company to:

  • Register growth in the FMEG sector.
  • Launch new products in the FMEG sector.
  • Increase distribution network.
  • Grow in international business.

Automation in the Company

The company has adopted automation in its manufacturing process to ensure faster and agile production. The Manufacturing Execution System or MES helps the company to record the actual consumption of raw materials used in production, thereby ensuring that there is less wastage of raw materials. To increase productivity and optimize capacity utilization, the company has also adopted Enterprise Resource Planning (ERP) and Maynard Operation Sequence Technique (MOST). This has further enabled the company to improve its position in the competitive market.

The Road Ahead

The company is witnessing growth and has bright prospects in the future. The owners of the company want to increase its revenue beyond the current figure of almost 7900 crores. The company aims to target sectors like mining, oil and gas, power, renewables, shipping, infrastructure, construction, telecommunication, and agriculture.

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