Diversification Strategies Case Study

GHCL: Global Aspirations

OR

Abstract:

GHCL, a Sanjay Dalmia group company was India’s third largest soda ash manufacturer and also had its presence home textiles product and Information Technology Enabled Services (ITES) sector. With the abolition of quota regime in textile industry, GHCL decided to strengthen its position further in the home textiles industry. In December 2005, it acquired Dan River, the third largest home textiles player in the US for $93 million. GHCL with the help of its low cost manufacturing facility in India planned to leverage the strong distribution channel of Dan River which spread across China, Pakistan.

Moreover, GHCL was confident in emerging as a global player in home textiles industry with the future acquisitions planned in England, German, France and Italy. The analysts were skeptical about the global aspirations of GHCL as it possessed a low presence in textile sector. The case discusses GHCL’s global foray into home textiles industry and the challenges ahead of it.

Pedagogical Objectives:

• To discuss the market entry strategies
• To analyse the diversification strategy
• To discuss the prospects of inorganic diversification strategy
• To analyse the prospects of acquisition and its chances of success.

Keywords : GHCL; Sanjay Dalmia; Dalmia Group; Dan River; Diversification Strategies Case Study; Home Textiles; Soda Ash; Market share; Market potential; Market Diversification; Acquisition; Restructuring; Quota regime; Global player; Roseby; S C Bega Upsom