Luxor Writing Instruments Private Limited - Marketing Pens in India: Introduction
In 2002, Luxor Writing Instruments Private Limited(LWIPL) had emerged as the market leader in thepremium pens
segment in India, with a market shareof 60%. The company held a 10% share in the writinginstruments industry, next only to the market leader,Reynolds that held 12%. LWIPL had been in the penindustry for nearly four decades. The companyadopted innovative marketing strategies that hadmade it one of the most popular pen manufacturers inIndia.LWIPL offered a widest range of pens with leadingbrands including Luxor, Pilot, Papermate and Parker.In December 2002, LWIPL launched the worldrenowned 'Waterman' brand of premium pens in India.This was possible after LWIPL's acquisition of a 50%stake in the Indian operations of Newell Rubbermaid
.The company planned to sell imported 'Waterman'pens for the next couple of years and then startindigenous production for these pens. The price of these pens ranged between Rs.3,500 to Rs.50,000 andwas made available in nine sub-brands. LWIPL plannedto sell these pens to corporate customers.Commenting on the prospects of the 'Waterman' brand, DK Jain, Chairman of LWIPL said,"Because of its price and brand name, Waterman will certainly have an edge over otherpremium brands in India."
The company planned to launch an international advertisingcampaign for these pens. LWIPL was known for its heavy spending on advertising itsproducts. It had entered into several tie-ups with multinational pen companies that helpedin leveraging its current position in the industry.The fact that LWIPL was a debt-free company was another significant achievement.However, with the rising competition and negligible presence in the faster growing gel penssegment, analysts felt that LWIPL had an uncertain future. Analysts also feared that LWIPL'sdecision to diversify into the hospitality and packaged foods business in 2001-02, might leadto a loss in market share in its core business.
Case Study Assignment – Luxor TechnologiesOverviewLuxor Technologies was a leader company in the wireless communications area between 1992 and 1996. Their products were based on low cost, high-quality applications of the state-of-the-art technology, rather than advanced state-of-the-art technological breakthroughs. The company refused to license their technology to other firms. Luxor did not feel the need for risk management, as they were a cutting edge company at this time. All this started to change with the major technological breakthroughs in 1996. The risk analyst they hired to assess the potential damage came to the conclusion that the major risk to Luxor is the technical risk. Management had to make a decision: either do their best to remain a technical leader in wireless communications technology or console itself with a future as a “follower”.Answers to questions:1. Can the impact of one specific risk event, such as a technical risk event, create additional risks, which may not be technical risks? Can risks events be interrelated?