STRATEGIC MANAGEMENT

COMPANY NAME- NTPCPRESENTED BY:ANNYATAMA BHOWMIKPGDM 2014-16

COMPANY HISTORY rNTPC Limited(formerly known asNational Thermal Power Corporation Limited) is anIndianCentral Public Sector Undertaking (CPSU) under the Ministry of Power, Government of India, engaged in the business of generation of electricity and allied activities. It was founded by Government of India in 1975. In May 2010, NTPC was conferred Maharatna status by the Union Government of India. It is listed in Forbes Global 2000 for 2014 at 424th rank in the world. The headquarters of the company is situated at New Delhi. NTPC's core business is generation and sale of electricity to state-owned power distribution companies and State Electricity Boards in India. Number of employees-25,484 (March 2014) Key personality- Arup Roy Choudhury(Chairman & MD).a

Company profile NTPC explored more than one way to generate power. Other than thermal power, they operate in hydro and gas regions too. Services- Electricity generation and distribution natural gas exploration, production, transportation and distribution. Presently, NTPC generates power from Coal and Gas. With an installed capacity of 43,143 MW, NTPC is thelargest power generating major in the country. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution. With an increasing presence in the power value chain, NTPC is well on its way to becoming an Integrated Power Major.

Vision And MissionVision:-To be the worlds largest and best power producer, powering Indias growth.

Mission:-Develop and provide reliable power, related products and services at competitive prices, integrating multiple energy sources with innovative and eco-friendly technologies and contribute to society.

Core Values BE COMMITTED

BBusiness Ethics

EEnvironmentally & Economically Sustainable

CCustomer Focus

OOrganisational & Professional Pride

MMutual Respect & Trust

MMotivating Self & others

IInnovation & Speed

TTotal Quality for Excellence

TTransparent & Respected Organisation

EEnterprising

DDevoted

Power Generation

Presently, NTPC generates power from Coal and Gas. With an installed capacity of 43,143 MW. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution. With an increasing presence in the power value chain, NTPC is well on its way to becoming an Integrated Power Major.

Growth of NTPC

Market share of NTPC

SWOT analysis of NTPCStrengths of NTPC

Largest market share in domestic power generation and a broad customer portfolio across the country. Excellent track record of performance in project implementation and plant operation. Diversified thermal generation portfolio. multiple sizes and fuel types. Highly skilled and experienced human resources, exposed to state-of-the art technologies in project execution and power generation. Navaratna status High brand equity among shareholders. Strong balance sheet ability to raise low cost debt. Engineering skills in project configuration and package design. Turnaround ability for old plants In-house training facility (PMI), CENPEEP, R&D etc. that assist in development of the sector.

Weakness

Hierarchy for decision making that affects responsiveness. Low risk-diversification of business portfolio consists primarily of generationassets. Poor financial health of customers. Functional orientation hampering cross functional perspective in decision making. Long and multi layered procurement process leading to long lead times and process delay. Fragmented IT architecture. Gaps in HR systems such as performance management, rewards and incentives and career development. Inadequate deployment of a strong knowledge management system that could assist in improving efficiency and effectiveness in all aspects of the business

Opportunities

Expand generation capacities by putting up thermal and hydro capacities, maintaining the position of a dominant generating utility in theIndian Power sector. Broad base fuel mix by considering imported coal, gas, domestic coal, nuclear power etc. with a view to mitigate fuel risks and maintainlong run competitiveness. Expand services for EPC, R&M and O&M activities in the domestic as well as international markets. Backward integrate into fuel management to exercise greater control and understanding of supply economics. Lead the development and commercial deployment of non-conventional energy sources especially in the distributed generation mode. Improve collections by trading, direct sale to bulk customers and the active role in allocation in new plants. Execute increased number of power plants that classify for Mega Power Projects status, thereby reducing the cost of the projects and power and power generated. Forward integrate into the distribution business in India.

Threats

Limited experience of operating in a truly liberalized environment with competition. Limited experience of operating in an independently regulated system. Redirecting power may be constrained by inter-regional connectivity. Downward regulatory and competitive pressure on tariffs. Stringent norms for approval of increase in capital costs for projects in event of time over run. Stringent environmental norms in the future may addto the cost of generation. Absence of an independent regular for coal industry and the delay in private investments lending to the risk of low availability of coal in the future

NTPCS CORE COMPETENCE India's largest power company, power generation being their core competence Climate of high behavioral control Low employee turnover High agreement among the employees, for what NTPC stands for. All these point to the fact that strong cohesiveness, loyalty and organization commitment exist in NTPC lowering he attrition Rate.Known as one of the NAVRATANS of the PSUS , NTPC has its following core values. They are known as (BCOMIT) as follows:-B-Business EthicsC-Customer FocusO-Organizational & Professional prideM-Mutual Respect and TrustI- Innovation & SpeedT-Total quality for Excellence

Porters Five Force Model

BARGAINING POWER OF SUPPLIERS : HIGH Coal is majorly used as a feed for generating power. The supply of coal in India is limitedand hence coal suppliers are in dominant position. Power companies are required toimport coal if the domestic supply is not sufficient, which proves to be an expensive affair. With companies like Lanco, Adani Power buying coal mines in Indonesia, Australia etc. to import better grade coal than available in India, market dominance of Govt. Companies like Coal India will subside gradually. However looking at the present situation, the power of suppliers is high. Switching costs Very high, as only large govt. companies are the suppliers.Substitute inputs As no substitute inputs, so the firms have no choice.

BARGAINING POWER OF CUSTOMERS : LOW Industrial consumers have huge demand for power Theirbargaining power is lowin India as the number of power companies to buy from is limited in number. Hence power companies are in better position. Retail customers -Government regulates the power sectorto ensure supply of power at reasonable prices but this regulation is limited. Overall, the bargaining power of buyers is Low. Low Switching Cost switching cost for the buyers is low as of now but is supposed to increase when new players come in the market as the product in not differentiable i.e. electricity.

THREAT OF NEW ENTRANTS : LOW

Highly capital-intensive industry and hence demands huge investment Power producers NTPC , SEBs contributing around 85 % of total power produced Obtainingregulatory approvals, fuel linkages, landetc. still remain the major bottlenecks. Hence the threat of new entrant appears to be lowFixed costs High fixed cost acts as a barrier to entry for new entrants.

THREAT OF SUBSTITUTES : MEDIUM

Power does not have substitute but it can be generated from different sources of energy. Currently thermal power is dominant in India, coal being the major raw material. Coal availability is limitedand therefore power from nuclear, hydro and other renewable sources could be used as substitute for thermal power in future. Agreements with various countries for nuclear collaboration will give major impetus to Nuclear power plants Althoughdemand for power outstrips its supply, going forward, thermal power plant companies have threat from non-thermal power generators. Hence the threat of substitute products is medium.

RIVALRY AMONG INDUSTRY : MEDIUM

Power producing companies No competitive rivalry as demand for power is way above its supply and all the power generated is used up. However, with government encouragement, private participation is expected to increase in the coming years to take advantage of huge demand for power Power equipment market- Market leader like BHEL is facing tough competition from L&T, Alstom, Doosan and most importantly Chinese suppliers. Major orders of Boiler, Turbine and Generator grabbed by Chinese suppliers from most of the private sector clients. So overall the intensity of competitive rivalry is medium.

COMPETITIVE POSITION

VALUE CHAIN MAPPING OF NTPC