Marketing Export

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A PROJECT ON

"EXPORT MARKETING"

HINDUSTAN AERONAUTICS LIMITED

Submitted by:

Raman Bisht

MBA 3rd SEM SECTION ‘C’

SPECLIZATION ON MARKETING

Under the guidance of:

INDUSTRY GUIDE FACULTY GUIDE

MR. SACHIN KHARE MR. ARVIND KULKARNI

MARKETING PLANNER

(SUMMER INTERNSHIP REPORT IN PARTIAL FULFILLMENT OF THE AWARD OF FULL TIME

MASTERS IN BUSINESS ADMINISTRATION (2008-10))

INSTITUTE OF BUSINESS STUDIES AND RESEARCH

PUNE

2008-2010

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STATEMENT BY THE CANDIDATE

I hereby certify that I, _______________________ have successfully completed my

internship with “HINDUSTAN AERONAUTICS LIMITED.” in the month of June-

July ‘09 from (01/06/09 to till 31/08/09). This is also to certify that this report is an

original product and no unfair means like copying etc… have been used for its

completion.

Name: RAMAN BISHT

Signature:

Date:

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CERTIFICATE BY FACULTY GUIDE

Certified that this report is prepared based on the summer internship project undertaken

by me in HINDUSTAN AERONAUTICS LTD. , LUCKNOW to June-July ‘09 from

(01/06/09 to till 31/08/09).,under the able guidance of Prof . Arvind kulkarni in partial

fulfillment of the requirement for award of degree of Master in Business

Administration from Institute Of Business Studies And Research, Pune

Date. ___________________

(Institute of Business Studies and Research) (Prof. Arvind Kulkarni)

Student Faculty Guide

3



CERTIFICATE BY INDUSTRY GUIDE

Certified that this report is prepared based on the summer internship project undertaken

by me in HINDUSTAN AERONAUTICS LTD. , LUCKNOW to June-July ‘09 from

(01/06/09 to till 31/08/09).,under the Able guidance of MR SACHIN KHARE.

Date. ___________________

(Institute of Business Studies and Research) ( Sachin Khare)

Student Industry Guide

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ACKNOWLEDGEMENT

No task is a single person effort, same is with this project. Thus I would like to extend

my sincere thanks to all those people who helped me in accomplishing my project.

I owe my project success to all faculty members, especially our Director for providing us

with this wonderful opportunity and guidance. I would like to extend my special gratitude

to Prof. Arvind Kulkarni for providing excellent facilitation for the successful completion

of this project. This project provided me a platform to increase my knowledge and

empowered me with a better understanding of concepts in the real world scenario. And

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last but not the least special thanks to “HINDUSTAN AERONAUTICS LIMITED” who

accepted me in spite of my inexperience in the field and gave me the opportunity to work

and learn with them.

(Raman Bisht)

\

TABLE OF CONTENTS

SYNOPSIS

OBJECTIVES

Introduction

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Organizational profile of the company

History

Product line

Research Methodology

Sources of data

Methods of data collection

Data analysis and Findings

Conclusion

Suggestions

Questionnaire

Bibliography

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TABLE OF GRAPHS

Graph 1 63

Graph 2 64

Graph 3 65

Graph 4 66

Graph 5 67

Graph 6 68

Graph 7 69

Graph 8 70

Graph 9 71

Graph 10 72

Graph 11 73

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SYNOPSIS

Project Title:- "Export Marketing" .

Project Objective:-To have better knowledge of how export and import control can be

done more effectively.

Methodology Adopted:- Study and observation of the commercial and logistics

department, collection of secondry data, use of questionaire.

Brief Summary of the Project:- I had to study the commercial department thouroly. The

project is mainly concerned with how export marketing is done, the methods and

techniques of export and import management.

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THEORITICALPRESENTATION OF THE

TOPIC

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The beginning of HAL can be traced to the year 1940 when a farsighted

industrialist,the late Seth Walchand Hirchand set up a company an aviation

industry that can manufacture, assemble and overhaul in collaboration with

inter continental aircraft compay of USA.

In the six decade the HAL has spread its wings to coiver various

activities in area of design,development,manufacture and maintenance.HAL

has bagged top exporter’s award from Engineering Export promotion

council for continuously last 9 years .it has also been awarded “Excellent

performing Public Sector Enterprise” from India institute of Industrial

Engineering.

HAL Management Academy

(HMA) was established by the

corporate management of

Hindustan Aeronautics Limited,

way back in August 1969, under the

then name of HAL Staff College. It

was re-named HAL Management

Academy in June 2001 to reflect its focus on management development,

consultancy and research. HMA has now competed 35 years of fruitful

contribution to the cause of management education.

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Responding to the need amongst practising managers to constantly refresh

and update their managerial skills, HMA offers a variety of programs in an

open and short duration format. These programs form a part of a larger focus

on Executive education. HMA’s programs prepare practising managers to

meet the challenges of today’s dynamic business milieu.

These programs provide exposure to the latest development in managerial

practice at a global as well as local level.

HMA’s programs break fresh ground in management thinking as well as

practice. Participants gain insight into both theory as well as application of

the latest in management. Participants are encouraged to apply learning in

their organizational contexts, with a view to formulate strategies for post-

program implementations.

Programs at HMA provide not just individual learning, but also the

opportunity to network with other practicing managers in the area, providing

for active sharing of experience as well as building useful contacts.

The programs offered are conducted by HMA Faculty, who provide a unique

blend of academic, research as well as consulting skills. In addition, all

participants have access to the vast infrastructure as well as resources of theinstitute.

MANAGEMENT DEVELOPMENT PROGRAMS

The Programs conducted at HMA are broadly categorized into

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• Individual Development

• General Management

• Functional/ Technical Programs

• Leadership Programs

Certain programs provide opportunity for experiential learning inside and

outside the classroom. Action oriented learning is imparted through

outbound training in serene settings away from the hustle bustle of the city.

FACULTY

HAL Management Academy has qualified and experienced full time faculty

who have worked for several years in production divisions. In addition,

senior executives from different divisions are also invited as guest faculty.

Apart from this, expert faculty from reputed institutions like the Indian

Institute of Management, the Indian Statistical Institute, the Administrative

Staff College of India, the Indian Institutes of Technology, the Indian

Institute of Science and other well known trainers, consultants are also

invited to handle sessions on specialized topics.

METHODOLOGY

HMA continuously reviews and modernizes its knowledge delivery systems

to add value to the services offered by it. A balanced mix of training

methods are used in the Programs. Interactive learning is supplemented with

case studies, syndicate work, role plays, management games, computer

simulated business experiences, outbound training, book reviews, panel

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discussions and project work. All participants are assigned project work. The

knowledge thus gained can be used in their respective work areas. Outbound

training provides them with opportunities for transformation to become

effective leaders and team players.

SOME PROGRAM THEMES

• LEAN Management

• Visionary Thinking through Strategic Management

• Human Resource Management for Competitive

Advantage in the dynamic environment

• Personality Development for Corporate Excellence

• Integrated Material Management & Supply Chain

Management for Value Addition

• Quality Management

• Finance Management

• Induction and Basic Management Program for new

entrants.

TOOLS FOR TRAINING

Diagnostics, experience-sharing, action-planning and learning diary help in

enhancing the effectiveness of learning. Diagnostics exercise enables participants to identify difficulties faced in their work-place, helps them in

analysing the situation and arriving at remedial solutions. The Learning

Diary helps participants identify key learning points. Individual and group

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action plans are the means for transferring learning from the classroom to

the work-place.

AMBIENCE

A sprawling building amidst thick

foliage, lush lawns, pathways and

flower beds provide a serene retreat

from the distractions of the bustling

metropolis. This ambience has a

soothing effect on the minds of the participants and takes them away from

the hectic business scenes to an idyllic location where they can review their

contribution from more creative perspectives.

INFRASTRUCTURE

• Training Halls

HMA has five air-conditioned and

acoustically-treated training halls with

seating capacity varying from 15 to 50,

with flexible seating arrangements. Each

classroom is equipped with an Overhead projector, writing board, Public

Address System, Digital Light Processing Projector (DLP), computer with

the necessary state-of-the-art software to make presentations.

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• Library

A good library with over 12000 books

mainly on management topics, a number

of professional journals and an impressive

collection of audio-visual aids supplement

classroom learning and assignments.

• Auditorium

An auditorium air-conditioned and acoustically designed with 180

seats is also available for viewing films / videos and conducting

seminars. A well-lit dais is also suitable for cultural Programs by

participants.

• Accommodation

Forty fully furnished twin occupancy rooms and five dormitories

provide accommodation for a hundred participants. A neat and tidy

cafeteria within the campus provides nutritious food and caters to the

palate of the participants from all over the country.

• Recreation Centre

The recreation centre is equipped with a home-gym, facilities for

indoor and outdoor sports and also a television set, which provide the

participants the much needed relaxation during the off-hours and

holidays. A lot of newspapers and magazines are also available.

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ORGANIZATIONAL PROFILE

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http://www.hal-india.com/e-paper.asp



HISTORY OF HAL Hindustan Aeronautics Limited (HAL) came into existence on 1st

October 1964. The Company was formed by the merger of HindustanAircraft Limited with Aeronautics India Limited and Aircraft Manufacturing

Depot, Kanpur.

The Company traces its roots to the pioneering efforts of an industrialist

with extraordinary vision, the late Seth Walchand Hirachand, who set upHindustan Aircraft Limited at Bangalore in association with the erstwhile

princely State of Mysore in December 1940. The Government of India became a

shareholder in March 1941 and took over the Management in 1942.

Today, HAL has 19 Production Units and 9 Research and Design Centers in 7 locations

in India. The Company has an impressive product track record - 12 types of aircraft

manufactured with in-house R & D and 14 types produced under license. HAL has

manufactured over 3550 aircraft, 3600 engines and overhauled over 8150 aircraft and

27300 engines.

HAL has been successful in numerous R & D programs developed for both Defense and

Civil Aviation sectors. HAL has made substantial progress in its current projects :

• Dhruv, which is Advanced Light Helicopter (ALH)

• Tejas - Light Combat Aircraft (LCA)

• Intermediate Jet Trainer (IJT)

• Various military and civil upgrades.

Dhruv was delivered to the Indian Army, Navy, Air Force and the Coast Guard in

March 2002, in the very first year of its production, a unique achievement.

HAL has played a significant role for India's space programs by participating in themanufacture of structures for Satellite Launch Vehicles like

• PSLV (Polar Satellite Launch Vehicle)

• GSLV (Geo-synchronous Satellite Launch Vehicle)

• IRS (Indian Remote Satellite)

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• INSAT (Indian National Satellite)

HAL has formed the following Joint Ventures (JVs) :

• BAeHAL Software Limited

• Indo-Russian Aviation Limited (IRAL)

• Snecma HAL Aerospace Pvt Ltd

• SAMTEL HAL Display System Limited

• HALBIT Avionics Pvt Ltd

• HAL-Edgewood Technologies Pvt Ltd

• INFOTECH HAL Ltd

Apart from these seven, other major diversification projects are Industrial Marine Gas

Turbine and Airport Services. Several Co-production and Joint Ventures with

international participation are under consideration.

HAL's supplies / services are mainly to Indian Defence Services, Coast Guards andBorder Security Forces. Transport Aircraft and Helicopters have also been supplied to

Airlines as well as State Governments of India. The Company has also achieved a

foothold in export in more than 30 countries, having demonstrated its quality and pricecompetitiveness.

HAL has won several International & National Awards for achievements in R&D,

Technology, Managerial Performance, Exports, Energy Conservation, Quality and

Fulfillment of Social Responsibilities.

• HAL was awarded the “INTERNATIONAL GOLD MEDAL AWARD” for

Corporate Achievement in Quality and Efficiency at the International Summit

(Global Rating Leaders 2003), London, UK by M/s Global Rating, UK in

conjunction with the International Information and Marketing Centre (IIMC).

• HAL was presented the International - “ARCH OF EUROPE” Award in Gold

Category in recognition for its commitment to Quality, Leadership, Technologyand Innovation.

• At the National level, HAL won the "GOLD TROPHY" for excellence in Public

Sector Management, instituted by the Standing Conference of Public Enterprises(SCOPE).

The Company scaled new heights in the financial year 2006-07 with a turnover of

Rs.7, 783.61 Crores.

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HAL’S VISION, MISSION, OBJECTIVES AND STRATEGIES

VISION

"To make HAL a dynamic, vibrant, value-based learning organisation with human

resources exceptionally skilled, highly motivated and committed to meet the current and

future challenges. This will be driven by core values of the Company fully embedded inthe culture of the Organisation"

MISSION

Enable all those working for HAL to give their best to ensure their all-round growth as

well as that of the Organization

OBJECTIVES

• To ensure availability of Total Quality People to meet the Organizational Goals

and Objectives

• To have a continuous improvement in Knowledge, Skill and Competence

(Managerial, Behavioral and Technical)

• To promote a Culture of Achievement and Excellence with emphasis on

Integrity, Credibility and Quality

• To maintain a motivated workforce through empowerment of Individual and

Team- building

• To enhance Organizational Learning

• To play a pivotal role directly and significantly to enhance Productivity,

Profitability and improve the Quality of Work Life

STRATEGIES

• To be in total alignment with Corporate Strategy

• Maintain Human Resource at optimum level to meet the objectives and goals of

the Company

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• Be competent in Mapping, Analysis and Up gradation of Knowledge and Skillsincluding Training, Re-training, Multi-skilling etc

• Cultivate Leadership with Shared Vision at various levels in the Organization

• Focus on Development of Core Competence in High-Tech areas

• Build Cross-functional Teams

• Create awareness of Mission, Values and Organizational Goals through out theCompany

• Introduce / Implement personnel policies based on performance that would ensure

growth, Rewards, Recognition, Motivation.

22



HAL’S PRODUCTS

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http://www.hal-india.com/AvionicsKorwa/products.asp

http://www.hal-india.com/AircraftNasik/products.asp

http://www.hal-india.com/Enginebangalore/products.asp

http://www.hal-india.com/Accessories/products.asp

http://www.hal-india.com/AircraftBangalore/products.asp

http://www.hal-india.com/helicopter/products.asp

http://www.hal-india.com/EngineKoraput/products.asp

http://www.hal-india.com/Aerospace/products.asp

http://www.hal-india.com/AvionicsHyd/products.asp



HAL’S SERVICES

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HAL’S DIVISONS

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HAL’S EXPORTS

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CUSTOMERS

International Customers Domestic Customers

• Airbus Industrie, France

• APPH Bolton, UK

• BAE Systems, UK

• Chelton, UK

• Coast Guard, Mauritius

• Corporate Air, Philippines

• Cosmic Air, Nepal

• Dassault Aviation, France

•Dowty Aerospace Hydraulics,UK

• EADS, France

• ELTA, Israel

• Gorkha Airlines, Nepal

• Hampson, UK

• Honeywell International, USA

• Island Aviation Services,

Maldives

• Israel Aircraft Industries, Israel

• Messier Dowty Ltd., UK

• Mistubishi Heavy Industries,

Japan• MOOG, USA

• Namibian Air Force, Namibia

• Peruvian Air Force , Peru

• Rolls Royce Plc, UK

• Royal Air Force, Oman

• Royal Malaysian Air Force,

Malaysia

• Royal Nepal Army, Nepal

• Royal Thai Air Force, Thailand

• Smiths Industries, UK

• Snecma, France

•

Strongfield Technologies, UK • The Boeing Aircraft Company,

USA

• Transworld Aviation, UAE

• Vietnam Air Force, Vietnam

• Air India

• Air Sahara

• Airports Authority of India

• Bharat Electronics

• Border Security Force

• Coal India

• Defence Research & Development

Organisation

•Govt. of Andhra Pradesh

• Govt. of Jammu & Kashmir

• Govt. of Karnataka

• Govt. of Maharashtra

• Govt. of Rajasthan

• Govt. of Uttar Pradesh

• Govt. of West Bengal

• Indian Airforce

• Indian Airlines

• Indian Army

• Indian Coast Guard

• Indian Navy

•Indian Space Research Organisation

• Jet Airways

• Kudremukh Iron ore Company ltd.

• NALCO

• Oil & Natural Gas Corporation Ltd.

• Ordnance Factories

• Reliance Industries

• United Breweries

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FLOW OF WORK

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Foreign suppliers are paid by any of the following methods as stipulated in theP.O./License agreement/contracts –

(a) Letter of Credit

(b) Sight Draft.(c) Advance Payment

(d) Direct Payment.

Bills of entry: It is a document filled by custom officers for giving custom clearance

to the goods received from foreign countries. Bills of entry are received by the agents

before receiving of goods. It includes:1

2 1. Total number of packages

3

4 2. Total amount of duty paid

5 3. Invoice value

6 4. Freight

7 5. Insurance

8 6. Exchange rate

9 7. Accessible value

RECEIVING CUM DISCREPANCY REPORT:RDR (Receiving cum discrepancy report) is prepared at the time of receiving of goodswithin organization. Pricing of RDR is done by two methods:

1

2 1. If the payment is done in advance and goods received later, then the RDR is3 priced at the value of exchange rate of the last day of the previous month.

4

5 2. If payment is done on the same day then the RDR is priced at value at which payment is done.

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FLOW OF RDR (Receiving cum Discrepancy Report) ON RECEIPT

OF MATERIAL

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CORE BUSINESS OF HAL

• Design and development of fixed and rotary wing Aircraft, engines,

Avionics and accessories.

• Manufacturing, maintenance, repair and overhaul of

Fighter, transport and trainer Aircraft

Helicopter

Aero engines

Accessories

Ground support Equipments

•Manufacturing of structural components for satellite and launch

vehicles

•Software development for aerospace application

•Design consultancy

HAL carries high burden of responsibly towards Indian Armed Forces.

95% of the product produced by HAL is for IAF.AL is engaged in

production of 20 types of Aircraft out of which 11 are indigenously

developed and other are developed in-house after getting technology under

license from different countries. The countries from which HAL has

obtained license are:

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U.K

FRANCE

SWEDEN

RUSSIA

ACCESSORIES DIVISION,LUCKNOW

Accessories division of HAL was established in 1970 with the primary

objective of manufacturing systems and accessories for various Aircraft and

Engines to attain self sufficiency in this area. At present it is turning out over

974 types of accessories. The division right from the beginning laid A lot of

emphasis on developing indigenous capability for design and development

of various systems and accessories.

The division is diversified not only in other defence applications like Tanks

and Armoured vehicle for Army, it explored possibility of commercial

applications of its- accessories. The division has been in forefront of

accessories development and supply not only to Indian Air Force but to

division today has a prime name in Aviation market and various

International countries are interested to join hands with it for future projects.

Division has also made steady progress in areas of export.

PRODUCT DIVERSITY

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Due to diverse technology the division is divided into 3 factories and more

than 900 accessories are being manufactured in various engineering.

FACTORY NO OF ACCESSORIES

1. Mechanical 537

2. Instrument 412

3. Fuel 25

Total 974

The division is engaged in repair and overhaul of accessories, with

turn-around-time is best in the industry. This has been the forte for over two

decades from piston to supervise Aircraft[ both civil & millitary].Site repair

facilities are extended by HAL team of expert engineers/technicians.

SERVICES PROVIDED FOR;

Military Aircraft

MIG series

Jaguar

Mirage-2000

Sea-harrier

AN-32

Kiran MK-I/MK-II

HPT-32

SU-30[proposed]

Civil Aircraft

Dornier

AVRO HS-748

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Helicoptors

Chetak [aloutte]

Cheetah [lama]

ALH [IAF/NAVY/COAST GAURDS/CIVIL]

Manufacture and supply of complete range of

Components of Cheetah and Chetak helicopters,Jaguar and MIG Series

aircraft to domestic and international customers to support their fleet at

most competitive prices and delivery lead time.

NEED EOR MARKETING IN HAL

There was a huge cut back in Defence expenditure and budgetary

support.

Liberalization in economy making purchasing costlier.

Only best can survive in this competitive age.

Large number of marketing opportunities.

Large export potential

Constant increase in non-civil operations.

Decrease in work load because of betterment of technology.

To earn foreign exchange and increase international trade.

GOALS OF MARKETING

To increase customer base

To acquire new customers

To improve existing order book

To obtain further workload

To create visibility of divisions

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To become financially self reliable

To increase total customer satisfaction

To explore the thrust areas of new avenues as customer

To advertise products and facilities of the division through

Exhibition, seminar etc.

Closer and prompt interaction with;

-component marketing

-airframe division

-authorised agent in foreign countdown

ACTION BEING TAKEN TO MEET

MARKETING GOALS

Defining marketing strategies

HAL participates in various air shows[domestic and international]for

exhibition of various ranges of aircrafts And services being offered by

HAL.It also maintains a Website[www.hal-india.com] wherein it

provides information about its products and services.

Doing SWOT Analysis

Defining Product-Market Strategy Mix

1.>It relates products with market and demands.

Identifying Suitable Markets

It regularly observes and studies the need of various

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Countries and based an their requirement identifies the

Market for its products.

Creating Specific Marketing Material

It is engaged in customized production i.e.need basic

Production of aircrafts and its accessories.

Closer Prompt Interaction With;

-Airframe Divisions

-Associated Departments

-Corporate Marketing Divisions

Corporate with selling agents,licensors and collaborators

Manage camp offices in different countries in order to get

Feed back from the customers and solving their queries.

For mainting closer and better relations it also stations liai-

Son offices of Airforce,Navy and Army divions of HAL.

Role Of Marketing Department In HAL

The Division was initially entrusted the task of fulfilling the needs of Indian

Defence Forces.However,due to change in aviation scenario liberalization of

the economy in the country,the management Has identified Indigenisation

and Export as the key thrust areas.

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To pursue the above strategy,the Marketing Cell[now marketing

department]was constituted in the division in December 1992 marketing

department serve a single contact point for all the overseas, Civil[domestic]

and DRDO customers and it deals in;

Identification of suitable market.

Create visibility of division and its products in market.

To increase customerbase/acquire new customers.

Preparation of Tecno-Commercial Proposals.

Improve order book/obtain work-load.

To in increase total customer satisfaction.

Create specific marketing materials.

To advertise products and facilities of the division through

Exhibition, seminars etc.

Closer and prompt interactions with

Corporate marketing

Airframe divisions

Authorized agents in foreign countries

Licensors/collaborators

Associated departments

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WORKING OF MARKETING DEPARTMENT

EXPORT MARKETINGSupply of products: This is broadly categorized as under :-

a) ADL product range.

b) Customized requirements i.e. Sub-Contract.

Technical/Commercial Proposal against RFQ/RFP :

Enquiries from overseas customers for submission pf proposals /

quotations for their defence & civil needs are received in Marketing

Department. The Techno-Commercial proposals are prepared by Marketing

Department in consultation with all associated departments and the same

after approval by competent Financial Authority (CFA) is forwarded to the

customer. The system flow Chart for the activities/interactions involved is

illustrated at Annex-3.1A .

Execution of Purchase Orders :

Purchase Orders/Contracts from overseas customers received in

Marketing Department are reviewed and compared with Techno-

Commercial proposals submitted by ADL. It is ensured that Purchase Order

is in line with ADL proposal and Technical & Commercial requirements of

customers can be met by ADL differences, if any are sorted out by writtencommunication/Purchase Order amendments.

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Repair & Overhaul :

Enquiries from overseas customers regarding confirmation on ADL

capability for undertaking repair/overhaul of items is received by Marketing

Department. Feasibility confirmation and indicative prices are intimated to

customer in consultant with associated departments and approval by CFA.

On receipt of Repair Order and unserviceable unit from the customer,

the unit is loaded to Assy & Test shop for Snag confirmation and repair

work assessment including replacement of defective parts. Based on the

work involved the Repair/overhaul prices applicable are worked out and

same is intimated to customer along with Turn Around Time (TAT). On

receipt of go-head and acceptance of price intimated by ADL from

customer, the repair work in finally taken up.

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The System Flow Chart for the activities / interactions involved is

illustrated as follows :

EXPORT MARKETING SYSTEM FLOW CHART

I Supply of Products

A) Technical / Commercial proposal against RFQ / RFP

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Execution of Purchase Order

Supply of Products

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MAIN OBJECTIVE OF PROJECT

• To prepare the Aircraft / Country Matrix

• To find prospective international customer and country following

parameters were scanned and analysed an the basis of which above

matrix is prepared:

1. ECONOMY : The consideration of economy is done in order to

evaluate the basic nature of economy. For instance a country

having the industrial and mixed economy who may be self

sufficient in manufacturing Aircrafts.

2. RESOURCES : The need for this parameter arose in order to

know the real strength of the country i.e., if a country is rich in any

resource then synergistic relations with the country can be easily

established such as country is rich in oil and gas resources may not

be good enough in other resource such as food products and this

deficiency can be easily overcome by establishing synergy. There

may be a country having poor resources in what we are rich and

the parameter can be considered for delivering the prospectivecustomers for HAL.

3. INDUSTRY : The nature of Industry of a country can be helpful

in determining the real nature of country and whether there is

scope of business with the country.

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4. FINANCE AND TRADE : Helps in determining financial

condition of a country, various financial institutions present,

trading policies of country and various trading partners with whom

the country is comfortable with.

5. DEFENCE EXPENDITURE : To know how much a country is

prepared to actually incur on Defence armaments. The more the

percentage of Defence expenditure, the higher the rate of being

prospective Customer.

6. RELATIONSHIP OF COUNTRIES WITH INDIA : This is

most vital ingredient of all parameters. Until or unless the

relationship with other countries are sound enough we cannot

approach them. For example although Pakistan is having all the

Aircrafts range manufactured by HAL but HAL would never liketo supply Aircrafts to Pakistan.

7. THREAT PERCEPTION : this is optional criteria for judging

prospective customers. There are various countries who are having

no threats from any other country like U.S.A. , Oman but still are

having wide range of Aircraft to make themselves powerful

whereas there are some countries who are having threats from

other countries and their purpose of keeping Aircraft is to protect

themselves e.g., India and Pakistan.

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OBSERVATION

After the analysis it was found out that the Oman is the most

prospective customer for Jaguar (Aircraft) segment with high defence

expenditure of 27.6 % with a very friendly relation with India and therefore

has been rated 1st position. Then comes Ecquador in 2nd position with

enormous economic potential followed by Nigeria and France.

In case of DO-228, Mauritius has been rated 1 st because of its good

terms with India, then comes Bhutan followed by other countries.

In Helicopter range that is SA-316 (Cheetah) Argentina stands at the

top followed by Ecquador, Bolovia, Toga, Chile and Peru respectively.

Lastly for other ranges of Aircrafts, U.A.E stands 1st

due to its good

trade relations with India followed by Nepal, Dominician Republic, Austria

and Belgium respectively.

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OBSERVATION

Research Methodology is type of blueprints prepared depending on

objective of the study. A research calls for development the most efficient

plan of gathering the needed information research methodology is the

specification of methods and procedures for acquiring the information

needed to structure or to solve the problems. It is overall pattern of

framework of the project that stipulates what information is to be collected;

from which resources and by what procedures, although research designs

may be classified by many criteria, but the most useful to my project were

exploratory studies. The major of the exploratory research are concerned

with the drawing of inferences that are used as the basis of management

action

Despite the necessity for flexibility, in exploratory study design, we

followed three separate stages that are usually included in exploratory

studies and typically conducted in the sequence listed below:

• 1st Stage : The preliminary data collection has been done from

secondary sources ( books, company, manuals etc).

• 2nd Stage : collection of information from internet and encyclopedia

of various countries for understanding the economy, trade, finance,

relationship with India etc.

• 3rd Stage : Discussions with company officials, participating in

company’s seminar and presentation, interviewing the persons who

are knowledgeable about the subject area being explored.

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SWOT ANALYSIS

Strength:

• Reduction of manpower.

• It has 19 production units and 9 research and design centers in 7

locations in India.

• Efficiency of employees is approx.100%.

• Has the monopoly over the market in aircraft maintenance and

manufacturing business in India.

• Is one of the Navratna company.

• It supplies mainly to Indian Defense Services, Coast Guards and

Border Security Forces.

• Being totally government owned company, it gets a lot of benefits

and tax exempted.

Weakness:

• Technology is weak in comparison to other countries.

• No proper work distribution because planning is weak.

• Work place is not cleaned before starting of shifts.

• No facility for entertainment during break time inside the factory.

•Overlapping of shifts due to which there is loss of work.

49



Opportunities

• Proper planning, training, recruitment etc.

• Indigenization of parts.

• The Indian government is asking for technology transfer in all its

deals with HAL being the designated manufacturer of such items.

• HAL’‟s recent accordance to navratna status will give it more

autonomy in functioning which could possibly make HAL into a

success story like ONGC.

• Some of HAL’s indigenous designs like Dhruv and the recently

launched.

• LAH (Light Attack Helicopter) have been received with applause in

the international.

Threats:

• Production suddenly stops due to change in government policy.

• If orders are not completed on time then import from outside.

• Inability to develop new technology may affect its customer base.

• Entry of foreign players.

• Foreign players are entering new joint ventures with local private

companies to enter the market .

50



PRESENTATION OF DATA

ANALYSIS AND FINDINGS

51



Various countries were scanned on the basis of the factors as

mentioned in the methodology, rank was provided to these countries on the

basis of the factors from 1 to 10,1 being the country highly probable to 10

being the least prospective customer for Hal. But in order to give the rank

weight age chart was prepared in which the maximum parameter of 10 was

allotted to each parameter. The Aircraft wise rating as arrived above is given

below:

RATING OF PROSPECTIVE COUNTRIES

JAGUAR

1. OMAN

2. EQUADOR

3. NIGERIA

4. UNITED KINGDOM

5. FRANCE

DORNIER ( DO-228 )1. MAURITIUS

2. BHUTAN

3. NIGERIA

4. THAILAND

5. IRAN

6. MALDIVES

7. MALWI

8. GERMANY

9. CAPEVERDE

10. ERITERIA

52



RESEARCH METHODOLOGY:

It was totally based on questionnaire, personal interview, and observation.

The departmental analysis is based on the observation which I made during

period that I have spent during my internship and it is also based on my

personal work that I was asked to work.

SOURCES OF DATA:

The source of data in my project was the employees of HAL. I gather the

information from employees for my project.

METHODS OF DATA COLLECTION:

Primary Data: The primary data has been collected through questionnaire,

personal interview and departmental analysis.

Secondary Data:

1 1. Website of HAL.2 2. Company monthly journals.

3 3. Training manual on cost reduction provided by HAL.

4 4. Accounting manual and Budget manual provided by HAL.

5 5. Pricing policy of HAL.

TOOLS AND TECHNIQUES OF ANALYSIS:

Data Analysis:

1 1. The introduction of an online website for any company of today’s

world is a boon. Cause growth and expansion will be a promising factor as

the internet makes the world a smaller place to do business. This was

introduced in the year in the year 2000 by HAL.

53



AIRCRAFT / COUNTRY MATRIX

COUNTRY ECONOMY RESOURCES INDUSTRY TRADE

&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

BOLIVIA

(S.America)

Agriculture

(70%)

Well endowed

with Zinc, Tin,

Antimony,

Tungsten andabundant source

of energy

Mining-70% of

F.E. earner,

food processing

etc.

Metals and

Natural gas are

leading export

goods. National banks and

financial

institutions

provide financialaids

1.95% of total

budgetSatisfactory SA-315B

Bhutan Agriculture,

Assistance by

India, ADB,

UN

Land locked

country and has

transit

agreement withINDIA

Manufacturing

Free trade with

India, 90% of

imports from

India

2% of total

budget

Very friendly.

Leading trade

partner.

DO-228

54





&FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Cape Verde

(W.Africa)

SSIs,Agriculture

earns reveue

from

InternationalAirport situated

Less natural

resources but rely

on fish and

volcanic rock

Textiles and

Pharmaceuticals

Fish processing.

Few Financial

institutions

present.

7% of total budget Satisfactory DO-228

Chile Agriculture Rich mineral

deposits.Copper

Mining, Fish

processing,

textiles, wood

products

30% trade with

Asian Contries

3.9% of total

budget

Satisfactory SA-315B

55





&FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Eriteria

(Africa)

Agriculture

(80 %)

Gold, Potash,

Iron, Live stock

Petroleum &

Refinery

National Bank

provides Finance

6 % Satisfactory DO-228

Germany(Central

Europe)

Advancedeconomy.

Tertiary sector

trade

Lignite, Coal,Steel. Ships,

chemicals,

Machinery.

Low natural

resources

Oil & naturalgas, Steel,

Electronics

Machine

Trade with ECmembers, UN,

Japan, Austria

20 % Provide machineryto India for ALH.

Leading

prospective

customer

DO-228

56





&FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Greece Least developed

country of EU.

Chronic BOP

problems

Few resources

mainly Bauxite

Steel,

Alumunium,

Cements &

Textile

Bank of Greece

and other state

controlled banks.

Trade withGermany and

Italy

6 % of GDP Satisfactory DO-228

Iran

Planned

economy,

Industrial

economy

Oil & Natural

gas

Machinery &

transport

equipments,

refining &

Mineral

Industry

Trade with

Western

Europe,Tehran,

Japan, Asia

3 % Provide machinery

to India for ALH.

Leading

prospective

customer

DO-228

57





&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Malaysia

(S.E. Asia)

Diversified and

fast growing

Rubber and Palm

oil

Electronic

equipments,

appliances,

chemical products,

textiles

Active financial

sector. Lot of

foreign

investment.Major partners

are Japan,

Singapore & S.E.

Asian countries

7 % Trying to

strengthenrelationship

Mirage

Maldives Fishries

Millet, Yams,

Melons,Coconut, Fish

Fishing,

tourism,shipping,

coconut

processing

Thailand, USA

&Srilanka


58





&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Mauritius Mixed Sugarcane, Tea,

Tobacco,

Potatoes

Tourism, Rum

processing of

Sugar & Tea

Large number of

Indians

contribute in

trade

5 % Very good DO-228

Oman

Well-off

Middle eastern

economy

Oil Crude oil

production,

refineries

Joined WTO.

Privatization of

economy. Low

inflation have body of

commercial law

to facilitate F.I.

27.6 % Very good Jaguar

59




COUNTRY ECONOMY RESOURCES INDUSTRY TRADE&

FINANCE

DEFENCEEXPENDITURE

RELATIONSHIPWITH INDIA

A/C

Myanmar Least developed

region and

agriculture

economy

Opium Textile,

Pharmaceuticals

, Oil refinery &

Paper mills

National banks

look after

financial aspect.

Importsmachinery &

equipments and

industrial raw

material

3.4 % Very good SA-316

Nepal Agriculture

Small and

Barelydeveloped

Jute, Rice

Industrial

production issmall segments.

Depends on

India and have

BOP problem

4.5 % Very good SA-316

60





&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Nigeria

(W.Africa)

Modern Market

economy

Renewable and

non-renewable,

Crude oil, naturalgas, coal, Tin

Mining,

Cements,

Textiles, cannedfood, Aluminum

products

Central bank

helps in

providingfinancial

assistance


Peru

(S.Amreica)

Agriculture,

less developed

economy

Copper, Iron,

Lead, Zinc,

Phosphates

Automobiles

appliances,

Steel, Textiles,

Cement

Central Reserve

Bank, National

bank and

development

Finance

Corporation.

USA chief

partner of trade

2.1 % Satisfactory Mirage-

SA-315B

61





&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Togo

(W.Africa)

Advanced

Economy. Open

door and non

discriminate andencourages

private investors

Phosphates,

Bauxite, Iron-ore,

uranium, Gold,Diamond

Mining and

Quarrying,

Petroleum

refinery, phosphoric acid

plants

National Bank

provides financial

aid. Major

Imports aremachinery,

transport andconstruction

equipments.

Major partners

are France &Germany

4.6 %Good SA-315

U.A.E. - Oil

Oil refinery

&

Exploration

Imports

transport

machinery

equipment.U.S., Australia,

Japan are

trading partners

40.9 % Regular Customer

of India

SA-316

62





&

FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Equador BOP problems,

Poverty

Petroleum

Petroleum, Food

processing,

wood products,chemicals

Imports

consumer goods,

industrial raw

goods. Bankingsystem collapsed

- Good Jaguar

Portugal Services based

economy

Forest

(pine, Oak &

Chestnut), coal,

Copper,

Titanium

Textile,

Chemical,

Paper,

footwear,

Glassware

Main export is

wine, canned

sardines, cork.

Bank of

Portugal looks

after finance

6.6 % Satisfactory SA-315B

63





&FINANCE

DEFENCE

EXPENDITURE

RELATIONSHIP

WITH INDIA

A/C

Thailand

(S.E. Asia)

Investment

oriented based

on Agriculture.

Tin

Manufacturing,

Cottage,

Textiles, teak

carving.

Bank of Thailand

is central bank

11.6 % Good Do-228

Malawi Agriculture.

Not enough for

commercial use.

Cotton textiles,

Canned food

stuff.

Main export is

wine, canned

sardines, cork.

Bank of

Portugal looks

after finance

3 % Satisfactory Do-228

64



Table 1: showing the improvement of the division on introduction of

a website:

Feedback Percentage

Management level Yes 97%

Labor level No 3%

BAR GRAPH SHOWING THE

IMPROVEMENT OF DIVISSION ONTHE INTRODUCTION OF WEBSITE

0

0.2

0.4

0.6

0.8

1

1.2

Management

level

Labor level

Feedback

R e r c e n t

Feedback

Percentage

ANALYSIS: 97% of the workers / employees are aware that the website has helped

the division to improve in its company’s dealings and has helped the company to

progress in the new economy of today’s world.

INFERENCES: The remaining 3% are those workers who are at the lowest cadre of work who do not have sufficient knowledge about the website of the organization.

1 2. The knowledge about the website should be fair among the people who

work in the organization to conclude that the workers are aware as to where the

company is heading to in the 21st century. HAL being a premier defense industry in

the field of aviation has to always keep up with the other nations and therefore adopt

new technology.

65



Table 2:showing the awareness level of the web by the workers in the

organization:

Response / Levels Management level Labor level

Aware / Yes 98% 87%

Not aware / No 2% 13%

0%

20%

40%60%80%

100%

Management

level

Labor level

Response v/s level

BAR GRAPH SHOWING THE AWARENES LEVEL OF

THE WEB BY THE WORKERS IN THE ORGANIZATION

Aware / Yes

Not aware /No

66



Table 3:representing the customers who respond to the website:

Customers PercentageDefense customers 85%

Foreign customers 45%

Corporate customers 6%

Civil customers 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Percentage

BAR GRAPH SHOWING THE CUSTOMERSWHO REPOND TO THE WEBSITE

Defensecustomers

Foreigncustomers

Corporatecustomers

Civil customers

67



Table 4: representing the number of customers who respond

voluntarily to the website:

Options Response in percentage

Most of them 30%

All 40%

Few 90%

Very few 70%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Response in percentage

Most of the

AllFew

Very few

68



Table 5: showing customers who placed order through net:

Customers who contact Percentage

Defense customers 70%

State government 20%


Civil customers 3%

0%

10%

20%

30%

40%

50%

60%

70%

Percentage

Defense customer

State government

Corporate custom

Civil customers

69



Table 6: representing international customers over the web:

Customers In percentage

Many 10%

Few 20%

Very few 5%

0%

2%

4%

6%

8%10%

12%

14%

16%

18%

20%

In percentage

Many

Few

Very f

70



Table 7: representing importance of customization to customers:

Feedback Response

Very important 90%

Important 80%

To some extent 50%

Not important 5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Response

Very importa

Important

To some ext

Not importa

71



Table 8: showing the sales of the division for the past 4 years:

Years Sales (in crores)

2001-2002 338.14

2002-2003 328.5

2003-2004 415.14

2004-2005 424.15

0

50

100

150

200

250

300

350

400

450

Sales (in crores)

2001-20

2002-20

2003-20

2004-20

72



Table 9: showing the profits of the division for last 4 years:

Years Profit (in crores)

2001-2002 46.5

2002-2003 65.9

2003-2004 62.55

2004-2005 51.66

0

10

20

30

40

50

60

70

Profit (in crores)

2001-20

2002-20

2003-20

2004-20

73



Table 10:showing new prospective customers over net:

Customers Percentage

Civil customers 10%


State government 20%

Defense customers 100%

74



Table 11: showing reasons for drawbacks in CRM over web:

Reasons for drawbacks Percentage of effect

Delay in reply 20%

Negligence 30%

Failure of system 40%

Other means 10%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Percentage of effect

Delay in reply

Negligence

Failure of syste

Other means

75



CONCLUSION

HAL is one of the largest PSU under the department of defense production, GOI and

is a “NAVRATNA” company ranked 34th in the list of world’s top 100 defense

companies. HAL with its wide spectrum of expertise in design, development and

manufacture of aircrafts, helicopters, engines, accessories and avionics has emerged

as major aeronautical complex in Asia. As herein, the projects and items need huge

investments than any other organization and confidential factor is also there too much

extent but as much information is extracted shows that cost control is being performed

quite good that’s why it is in so much profit. In the organization, cost of inventory as

well as labor is controlled very well by implementing ABC analysis but there is also

some scope for cost reduction by reducing number of casuals to reduce labor cost and

by implementing EOQ (Economic Order Quantity) technique to control material cost.

Although for the organization’s betterment its executives are working hard and trying

to serve in the best possible manner with their colleagues and they all are very

qualified and experienced so organization must extract optimum from them.

76



SUGGESTIONS

1. There should be facility of intranet so fax and such other things must be done

through that can reduce time and money.

2. For attendance finger print system should be adopted so that actual person’s

attendance can be mentioned.

3. The following are some of the costs that exist in HAL;

• material cost

• labour cost

• employee cost

• inventory costHAL may try and reduce these costs by the following ways;

• Labour cost can be reduced by more use of machinery.

• Salary and appraisal should be given according to the performance of the

employees in order to reduce the employee cost.

• By implementing EOQ.

4. The time delay between rising of purchase order and preparation of RDR

should be reduced.

5. Wages to direct workers should be given through piece rate system.

6. Efficiency of indirect workers should be measured so that slackness can be

sorted out

.

7. Employees should be included in brainstorming and also should be given

liberty and non-monetary incentives as appreciation

.

8. Officers should be promoted only on the basis of performance and not on the

basis of number of years worked

.

9. Workers who have talent and compatible with office grade but restricted towork only at non-supervisory position, the policy should be such so that grade

promotion could be possible.

10. Profit calculation by project cell for project evaluation is different from

costing section. In this way project evaluation is not proper. So it must

frame its cost- benefit evaluation and focus on only licensing fee and other

DRE and framing of analysis should be done as per actual recoverable profit

percentage.

11. The company should give some stipend to Industry guide for summer

training due to which they will take more interest in providing guidance.

77



12. Should be a separate lecture hall for summer trainees where the industry

guide will come and provide guidance to all trainees.

There

13. It is also suggested that the frequency of meetings with the foreign teams

should be more than presently done. For more the people we meet, the closer

tie will be promoted and this will definitely increase profits.

14. The Company should distribute its brochures – giving the present business

standing, new technologies launched to the overseas customers, this will

develop a kind of confidence in the minds of customers for you, and he will

call you whenever he is in need.

15. More awareness is to be created in the minds of customers whether overseas

or civil, by organized Trade Fairs, Expos, Consumer Fairs at International

level so that more and more customers will come and gain knowledge about

the company, its product and it servicing.

16. The company should find some new overseas customers dealing in the same

business, and must try to offer him the same product that he is making in

comparatively low price (per unit cost), keeping in mind the positive turnover,

this will definitely bound him to purchase the product from the company.

17. The company should try to establish some more Joint Venture relationships

with the foreign companies, dealing in the same business. This will again

make a positive effect on the net sale.

78



ANEXURE

79



QUESTIONNAIRE

Name:

Designation:

Section / Department:

1 1. Describe the major activities being carried out at the accessories division?

2

3 2. Batch costing and job costing is carried out for which of these activities?

4

5 3. Is there a component costing system in existence?

6

7 4. On what basis is the production work undertaken?

8

9 5. What is your comment on the present budgeting system?

10

11 6. Describe the procedure of processing the cost ledger?

12

13 7. Describe the current practice followed in calculating the cost for various

departments?

14

15 8. Describe the steps taken to improve the international relationship withforeign companies like Terbomecca and Rolls-Royce?

16

17 9. Is the current computer system capable of tracing the work flow?

18

19 10. Describe the work order structure?

20

21 11. How are the work order issued?

80



BIBLIOGRAPHY

During the preparation of project I took the help of various sources which are asfollows:

Books

• Budgetary control and standard costing

BY: J.A. Scott

Journals :

1 Accounting manual

2 Budget manual

3 Company monthly journals

Internet :

1 www.hal-india.com

2 www. Wikipedia.com

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