Core Competencies and Competitive Advantage Case Study

Eveready's LED Lantern: Overstretching Its Core Competency?

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Abstract:
Starting its journey as the National Carbon Company (a subsidiary of Union Carbide Corporation (UCC), US), Eveready Industries India Limited (Eveready), forayed into the Indian dry cell market in 1905 with batteries imported from the US. Exploiting its manufacturing capabilities and extensive distribution network, the company emerged as the market leader in the industry. Additionally, to boost the sales of its D-size (large-sized) batteries and to sustain its market leadership in this segment, the company started manufacturing torchlights. Over the years, Eveready offered a wide array of diverse products ranging from flashlights to packet tea and mosquito repellents and established itself as an FMCG player in India. However, Eveready’s supremacy in the dry cell market suffered a setback with the entry of cheap, Chinese LED torches. The stiff competition from the Chinese players took a toll on the sales of Eveready’s D-size batteries, which contributed significantly to the revenues of the company. In an attempt to revive this declining demand, Eveready forayed into the LED lamp segment in April 2009 by introducing Homelite, the company’s battery-run lanterns. However, the dynamics of the industry changed, with both, the distributors and customers, preferring the rechargeable lanterns to their battery-operated counterparts.

In this scenario, the case study focuses on whether Eveready’s battery operated LED lanterns will be able to survive in the long run and whether its initial decision to enter the LED lantern segment itself was a hasty step?

Pedagogical Objectives:

• To understand the concept of core competency and analyse how Eveready’s core competencies helped it gain a competitive advantage in the dry cell market
• To understand the landscape of the Indian dry cell battery segment
• • To debate on the implications of Eveready’s entry into the LED lantern segment.

Keywords : Core Competency, Competitive Advantage, Capabilities, Capabilities Vs Core Competencies, Internal Capabilities, Factors Determining Competitive Advantage, Eveready Industries Limited, Homelite, Nu LITE, Distribution Network, Give Me Red, Fast Moving Consumer Goods (FMCG), Rechargeable LED Lanterns