B2B Project On

LARSEN & TOUBRO

It’s All About Imagineering

SUBMITTED BY

Group 8

KIRTI M.SIDDAPUR 08PG029

SANA NABI 08PG044

MANDANNA T.M 08PG034

SUDIPTA SAR 08PG055

ROHAN NAIR 08PG043

CONTENTS

1. COMPANY OVERVIEW

2. ORGANIZATION STRUCTURE

3. PRODUCT AND SERVICES

4. CORE COMPETIENCIES

5. MARKETING STRATEGIES

6. PEOPLE AND PROCESSES

7. DISTRIBUTION CHANNELS

8. PRICING STRATEGY
COMPANY OVERVIEW

Larsen & Toubro Limited (L&T) is a technology, engineering, construction and

manufacturing company. It is one of the largest and most respected companies in India's
private sector.

Seven decades of a strong, customer-focused approach and the continuous quest for world-
class quality have enabled it to attain and sustain leadership in all its major lines of business.

L&T has an international presence, with a global spread of offices. A thrust on international
business has seen overseas earnings grow significantly. It continues to grow its overseas
manufacturing footprint, with facilities in China and the Gulf region.

The company's businesses are supported by a wide marketing and distribution network, and
have established a reputation for strong customer support.

L&T believes that progress must be achieved in harmony with the environment. A
commitment to community welfare and environmental protection are an integral part of the
corporate vision.

OPERATING DIVISIONS

Engineering & Construction Projects (E&C)

Heavy Engineering (HED)

Construction

Electrical & Electronics (EBG)

Machinery & Industrial Products (MIPD)

IT & Technology Services

KEY FACTS
Founded: 1938

Number of employees: 35000(2007)

Revenue: US$ 8.50 Billion (2009)

Headquarters: Mumbai, India.

VISION

The L&T vision reflects the collective gaol of the company. It was drafted through a large
scale interactive process which engaged employees at every level, worldwide.
ORGANISATION STRUCTURE
CORE COMPETENCIES
• Innovation

• Planning

• Technology

TECHNOLOGY

Engineering and construction

In engineering and construction, L&T's technology capabilities include a strategic mix of in-
house strengths and the expertise of its joint venture partners. Engineering Centres at Mumbai,
Vadodara and Delhi carry out process design and simulation, analysis of computational fluid
dynamics, mechanical design, failure analysis and trouble shooting.

L&T has set up an engineering and project management centre in Abu Dhabi, to undertake oil
and gas related projects as well as engineering and consultancy services.

An engineering centre in Sharjah is an extended arm in the Gulf. This is supplemented

through collaborations with key partners: L&T-Valdel for engineering services in the
upstream hydrocarbon sector, L&T-Chiyoda for the mid and downstream sectors, and L&T
Sargent & Lundy for the power sector.

The engineering services provided by L&T's Engineering Design Research Centres at

Chennai and Kolkata include feasibility studies, project reports, system engineering,
architectural, structural and civil design for infrastructure development projects.
L&T-Ramboll Consulting Engineers provides civil engineering and consultancy services for a
wide range of projects in the transportation sector - ports, airports, highways and bridges.

MANUFACTURING

L&T's design & engineering capabilities in manufacturing enable it to set new benchmarks in
terms of scale, sophistication and speed. The Company has dedicated engineering centres at
the manufacturing locations. Two 'Technology Development Centres' have been set up to
develop new products and manufacturing technologies. L&T also collaborates with the
organisations like ISRO to bolster its capabilities in the strategic sectors of aerospace, defence
and nuclear power.

L&T's Electrical & Electronics Division is a pioneer in the design of switchgear and
switchboards that are engineered for tropical conditions. It has built further on this experience,
and has leveraged its R&D strengths to develop a host of new products and features.

In 2008-09, the division filed applications for over 100 patents, improving its previous year’s
score of 101 patents. Cumulatively, L&T's Electrical & Electronics Division has applied for
and secured 409 patents - a landmark for an Indian company. Patent applications cover
innovations made on a variety of low voltage indigenously developed switchgear products
like the air circuit breakers (ACBs) and moulded case circuit breakers (MCCBs), medical
products, petroleum dispensing pumps, tooling solutions and switchboards.

TECHNOLOGY SERVICES

L&T provides its global clients with the winning edge through the development of optimal
solutions. L&T's e-engineering services leverage the Company's own engineering heritage and
experience. The Embedded Systems unit provides technological assistance across a broad
spectrum - design, maintenance, re-engineering, testing, prototyping and industrial design.
PORTFOLIO OF PRODUCTS & SERIVCES

The following are the portfolio of products and services offered by L&T

1. Engineering & Construction – Projects(EPC)

L&T’s engineering and construction track record consists of successful implementation of

turnkey projects in major core and infrastructure sectors of the Indian industry. L&T has
integrated its strengths in process technology, basic and detailed engineering, equipment
fabrication, procurement, project management, erection and construction and commissioning,
to offer single- point responsibility under stringent delivery schedules. It is the only Indian
EPC company pre- qualified for executing large, process-intensive projects for oil and gas,
refinery, petrochemical and fertiliser sectors.

The various sectors for which L&T has done turnkey projects are Oil and Gas, water, Power,
Cement and allied machinery, Engineering services and Railway projects.

2. Heavy Engineering:
L&T is acknowledged as one of the top five fabrication companies in the world, with
engineering and manufacturing capabilities that are among the most sought after in industry.
Operating at the higher end of the technological spectrum, L&T has led the way in
introducing new processes, products and materials in manufacturing. It has the logistics
capabilities of fabricating and supplying over- dimensional equipment to tight delivery
schedules.

The products in this category include hydrocrackers, reactors, heat exchangers,

polymerization reactors etc.

Shipbuilding
Shipbuilding represents a new thrust for L&T in the high technology manufacturing space and
is in line with its strategic growth objectives. L&T is developing a shipyard capable of
constructing vessels of up to 150 metres in length and displacement of 20000 tonnes at its
heavy engineering complex at Hazira near Surat on India’s west coast. The focus will be on
construction of commercial vessels, warships for the navy and the coast guard.

Construction

The Engineering Construction & Contracts (ECC) division of L&T is India’s largest
construction organisation. Its leading edge capabilities cover every discipline of construction
– civil, mechanical, and electrical and instrumentation. L&T has also expanded its focus to the
Middle East, South East Asia, Russia, CIS, Mauritius, African and SAARC countries. It also
has keen interest in the markets of Indian Ocean rim countries, Africa and Latin America.
Construction includes construction products like support structures etc. They also provide
construction services like Fire Protection, Building Automation (IBMS), Vertical
Transportation, Plumbing and Sanitary, Surveillance and Security Systems,
Telecommunication networks, Electrification, Kitchen, Laundry, Water and Effluent
management, Medical equipment for buildings

Electrical & Electronics

L&T is a major international manufacturer of a wide range of electrical and electronic

products and systems. In the electrical segment, the Company holds leadership position in low
tension switchgear in India, and is rapidly establishing itself in international markets. Its
products are widely sold in markets in Europe and Australia. Recently, L&T set up a new
manufacturing base for high-end air circuit breakers in China. It joined hands with Saudi
Arabia’s reputed house of Kanoo to offer a range of high-end intelligent electrical systems to
Saudi Arabian market. L&T also manufactures custom- engineered switchboards for
industrial sectors like power, refineries, petrochemical and cement. In the electronic segment,
L&T offers a wide range of meters and provides complete control and automation systems for
industries. Medical equipment and systems manufactured by it include advanced ultrasound
scanners and patient monitoring systems. They also manufacture medical equipments like
ECG machines, electrosurgical diathermies and ultrasound scanners etc.
Information Technology

Larsen & Toubro Infotech Limited, a 100 per cent subsidiary of L&T, offers comprehensive,
end-to-end software solutions and services with a focus on Manufacturing, BFSI and
Communications & Embedded Systems. It provides a cost cutting partnership in the realm of
offshore outsourcing, application integration and package implementation.

Machinery & Industrial Products

L&T manufactures markets and provides service support for critical construction and mining
machinery – surface miners, hydraulic excavators, aggregate crushers, loader backhoes and
vibratory compactors.

PRODUCTS

Turnkey Proj Construction EPS

Hydrocarbon Construction Services Refinery

Power Infrastructure Oil & Gas

Cement Engg. Services Petrochemicals

Engg. International Projects Fertilizers

Petroleum Coal Gasification

Aero space

Thermal Power

Nuclear Power
EEPS IT MVI FIN SHIP
SEVICES BUILDING
Switchgear Information Infrastructure
services Financing
Electrical Systems Engg. Equipment
Services Financing
Metering Systems Embedded
Services
Medical Equipment
Control
Petroleum Dispenser

The offerings are divided into two parts – i) Project Executions

ii) Products

The projects are executed not only in the domestic sector, also in the international locations.
The credentials what it has earned over the last decades has made a distinct branding for the
companies. The latest order of Rs. 6900Cr from Mahagenco has established the company in
the international Power Equipment Business.

The industrial products like the welding products, Valves, Switchgear, Metering Systems are
known for high standard technologies & relaiblity.
PEOPLE & PROCESSES

Company recognises that people are the real source of competitive advantage. It is through
people that ECC delivers total customer satisfaction. These values are reflected in our
Human Resources practices which have earned national recognition several times.

The employee goes through a process of continuous learning, assisted by training

programmes. Apart from on-the-job training and technical training, over 100 programmes on
general management and behavioural topics are conducted each year. Interactive CD-ROM
based programmes have enabled employees learn at their pace.

ECC has always believed in experimentation with and implementation of new ideas. HR
practices such as collaborative performance appraisal, career & succession planning, team
rewards have been institutionalised.

An extensive and rigorous recruitment process ensures quality induction. L&T's Graduate
Engineer Trainee recruitment process covers India's major engineering colleges and
institutions. Programmes, plant visits and comprehensive information-sharing facilitate
induction.

Division has an ongoing organization development programme, which is one of the longest
sustaining OD efforts in India.

The basic principles of Human Resources policies include

• Recruitment based solely on merit by following well-defined and systematic selection

procedures without discrimination
• Sustain motivated and quality work force through appropriate and fair performance
evaluation, reward and recognition systems
• Identify training needs within the Organisation and design and implement those need
based training programmes resulting in continuous up gradation of knowledge, skills
and attitudes of the employees
• Maintain a quality Human Resource Management System to meet the international
standards as per ISO 9001. Plan, design, train, equip and motivate the department staff
to meet this standard of expectation.

WORK CULTURE

Work culture emphasises:

· Freedom to experiment
· Continuous learning and training
· Transparency
· Quality in all aspects of work
· Rewards based on performance and potential

A majority of L&T’s processes are ISO certified and comparable with the best in the world.

The company has an on time/ on budget project completion rate higher than the average for its
industry, which translates to highly predictable construction & Engineering services delivery
for its clients.

MAJOR COMPETITORS

Oil & Gas Power Construction Electrical &

Electronics

LG BHEL HCC Schneider

Hyundai LG Gammon Siemens

Samsung Alstom Nagarjuna ABB

NPCC GE IVRCL -
MARKETING STRATGIES

CORPORATE SOCIAL RESPONSIBILITY

HEALTH
L&T's participates in building a healthy community through continuing initiatives in several
areas of healthcare, with a focus on mother & child care and HIV/AIDS awareness. All L&T
locations, including construction sites, have in-house AIDS awareness programs. Five
additional mother & child care centres were set up in 2006-07. In partnership with local
NGOs, these centres benefit children of commercial sex workers, street children and tribal
communities. Through health care centres and regular family camps L&T organizes health
checkups, provides gynaecology and laboratory facilities, carries out free cataract surgeries
and intra ocular lens implants, and helps maintain health data for children. Supply of
equipment and aid for orphanages and physically challenged children, periodic counselling to
combat rampant alcoholism, awareness camps on childcare, reproductive health, sanitation,
dental check-up, provision for safe drinking water, cancer awareness etc. are other healthcare
activities that L&T supports.

EDUCATION

L&T's diverse and sustained programmes in education provide underprivileged children with
learning opportunities through supply of educational materials, teaching aids, recreational
tools and up scaling school infrastructure. L&T also enriches children's lives through
programmes like summer camps, maths coaching, providing facilities like science
laboratories, scholarship to deserving students, etc.

The vocational training institutes of the Larsen and Toubro Public Charitable Trust provide
local communities with skill-based training in Formwork, Masonry, Agro Mechanics,
Electricals, Fabrication, Welding and Housekeeping. Various diploma courses are also
conducted by L&T Institute of Technology for the children of employees. L&T has
developed training modules in local languages in six centres across India for imparting skills
sets in construction. L&T Training Centres provide courses for improving the standards of
electrical engineering practices and for upgrading knowledge of maintenance, repair and
welding.

ENVIRONMENT

Global warming: at L&T, we have always been conscious of the need to maintain harmony
with the environment. We continuously seek newer environment-friendly approaches in all
our operations – energy conservation, exploring alternative sources like wind and solar
energy, waste water reduction, etc.

The Zero Discharge approach of the Powai Campus saves over 350,000 litres water every day
through water treatment and recycling. More than 13,500 trees have been planted in different
L&T campuses in the last year, and an additional 4,000 saplings were distributed among local
communities.

RESPONSE TO NATURAL CALAMITIES

L&T and its employees have provided relief measures during natural calamities like
earthquake and floods. L&T has assisted in disaster relief through employee and corporate
donations, employee volunteering, supply of construction material, medical and food supplies.
After the floods in Surat (Gujarat-India), L&T played a major role in road-clearing
operations, organising medical camps, and supply of food, water, clothes and other relief
materials.

EMPLOYEE VOLUNTEERING

L&T encourages employees to volunteer for CSR activities, resulting in a self-driven

approach while retaining consistency. L&T employees and the ladies clubs formed by their
families at different locations, serve their communities by investing personal resources and
time.

From taking initiatives in building the next generation of productive citizens, empowering
women, paying regular visits to old age homes and orphanages, to organising blood donation
camps, our employees have always believed in truly making a difference to the world in
which they live.

PARTNERSHIP
ENGINEERING & CONSTRUCTION

i) L&T-Sargent & Lundy Limited

A joint venture with Sargent & Lundy (USA), it offers a complete range of engineering and
design services for the power sector.

ii) Larsen & Toubro (Oman) LLC

A joint venture between L&T International FZE and The Muscat Trading Co. LLC
 iii) Bangalore International Airport Limited (BIAL):

A JV of Karnataka State Industrial & Investment Development Corporation (KSIIDC),

Airports Authority of India (AAI), Siemens, L&T and Unique (Zurich Airport) of
Switzerland, to develop an airport at Devanahalli, Bangalore on BOOT basis.

MACHINERY & ENGINEERING

1) L&T-Case Equipment Private Limited

A joint venture of L&T and CNH America LLC (CNH America LLC is a wholly owned
subsidiary of CNH Global N.V., USA, which has manufacturing and marketing facilities
worldwide. It is the world's largest manufacturer of loader backhoes).

2) L&T Komatsu Limited (LTK)

A joint venture of L&T and Komatsu Asia Pacific Pte Ltd., Singapore, a wholly owned
subsidiary of Komatsu Ltd., Japan. LTK manufactures hydraulic excavators and high
pressure hydraulic equipment, such as cylinders, turning joints, radial flow pumps, axial
piston pumps, Cam-lobe radial piston motors, axial piston motors, gear boxes / drives and
systems.

3) Tractor Engineers Limited (TENGL)

A wholly-owned subsidiary of L&T. It designs and manufactures crawler undercarriage

systems for excavators, blast-hole drills, bulldozers, amphibious dredgers, mobile crushers,
etc. Apron feeders, chain conveyors, scraper conveyors, track modules, and crawler lowers
are tailor- made by TENGL for material handling, and mining applications. TENGL
manufactures centrifugal slurry pumps, which have found wide acceptance in industrial
application and oilfield exploration.

4) Audco India Limited (AIL)

A joint venture company with equal equity holding by L&T and Flowserve Corporation,
USA It is a leading manufacturer of industrial valves, with four independent and specialised
manufacturing facilities.

5) L&T-Demag Plastics Machinery Limited

A 50:50 joint venture of L&T and Demag Plastics Group, Germany, it is the market leader in
India, involved in the manufacturing of a range of injection moulding machines for
processing of thermoplastics and thermosets. The joint venture partner, Demag Plastics
Group, Germany is a world leader in the field.

6) EWAC Alloys Limited

A joint venture of L&T and Messer Eutectic Castolin Holding GmbH, Germany. It
manufactures special purpose welding electrodes, brazing rods, welding and soldering fluxes,
powder alloys and delivery systems, flux-cored welding wires, cold repair compounds and
wear plates.

GLOBAL STRATEGY

Railway bridge construction in Western Thailand in 1956. It was later immortalized by the
film “The Bridge on the River Kwai”. It was obstructed by the companies from Germany &
Japan. So, it concentrated on smaller orders to build its credibility. In 1976, it got the
subcontract for Abu Dhabi International Airport which was the landmark for its credibility.
It was in the mid-90s when the Indian government had initiated the liberalization process that
L&T revisited its options overseas. Due to its prior experience in the UAE, the Middle East
was an obvious choice. To build up a reputation as a quality provider of engineering and
construction services, L&T management decided to follow a policy of “Take only what you
can deliver”, bidding for contracts only when it was confident of timely completion. Based on
the business policies of the Gulf countries, L&T went for joint ventures wherever required to
secure contracts. In 1994, L&T Oman LLC was established as a joint venture with The Zubair
Corporation, a leading business group of the Sultanate of Oman. In the UAE, L&T registered
as an independent corporation in 1996. In Saudi Arabia, L&T established a joint venture
called L&T Saudi Arabia LLC in 1999. In 2001, L&T incorporated a wholly owned
subsidiary called L&T International FZE at Sharjah to provide project consultancy, equipment
lease services and maintenance of plant and machinery in the Gulf region.

By mid 2006, almost all the Emirates had announced infrastructure plans, the total cost of
which was estimated to be approximately $270 billion over the next ten years. Recognizing
the growth potential, L&T’s management decided to expand its resource base and opened new
offices in Dubai, Sharjah and Ras al Khaima in addition to Abu Dhabi. Some of the
prestigious projects executed by L&T include four bridges at Palm Island, residential
buildings at the Dubai Marina and construction of Raysut Cement Plant, Oman. Exhibit 1
provides a detailed list of projects successfully executed by L&T E&C in the Middle East.
Apart from the Gulf region, L&T E&C also gradually expanded its overseas operations to
Russia, the CIS countries and China. Projects executed include a hydrogen reformer package
for Dalian petrochemicals

in China, turnkey construction of international hotels at Uzbekistan and construction of

residential township at Zernograd, Russia.

GLOBAL PRESENCE

PROMOTIONAL STRATEGIES

For the offerings like Turnkey Projects, Construction Projects, Engineered Products &
Systems, IT, Financial services, Shipbuilding, the company directly maintain relationship
with the customers.

Promotional strategies adopted by the organisation are:

• Trade Shows
 • Telemarketing

• Product Brochures

• Direct selling

The EEPI & MVI categories are dependent on the respective distributors. The sales reps of
the company along with the distributors market those products.

CORPORATE BRANDING CAMPAIGN

IMAGINEERING

L&T launched a corporate Branding campaign where it projected its capabilities in every
category as “IMAGINEERING”.

As part of corporate brand building plans, L&T has produced a series of TV commercials on
its business verticals. Each commercial shows some of its business offerings, and highlights
the role that plays in everyday lives. The commercials were telecasted on CNBC- India’s
leading business channel till December 26, 2008.

The advertisements focus on two core values of the organization:

• Innovativeness

• Customer focus and development focus

FOR ENGINEERS : A benchmark in innovation

FOR A TRAVELLER : Fewer hours travelled, more hours lived

FOR THE RECORD : Asia’s highest

FOR KONKAN RAILWAY : Accolades

FOR US : Imagineering as usual

The company gives its message that

• As how it has achieved the excellence of being Asia highest

• How it as created a level of performance and innovation through its engineering

• How it is serving to the needs of its customers & consumers by providing them with
revenues generated plus consumer satisfaction.

• More over for Konkan Railways, the project achieved is a matter of pride but

• For L&T it is merely creative & Innovative & Planned design based on what started
with an imagination & now has taken a practical shape.
DISTRIBUTION CHANNELS

Distribution Channels at L&T –Various Divisions

It has a global supply network with offices in 10 locations worldwide, including Houston,
London, Milan, Shanghai, and Seoul.

L&T Construction Division:

All the distribution is project based, and the sales are made through direct marketing. This is a
Zero Level Channel Structure and this enables direct control to L&T project development
teams.

L&T Engineering Equipment:

The equipment is dealt through dealers and other channels of delivery where the equipment
sale can be made through dealers e.g., turnkey, valves etc
The sales pitch is made and followed up and detailed later on by the Dealers present in the
Area, The distribution network is based on each geographical area.

L&T Financial Services:

In spite of increased competition from alternate distribution channels, L&T believes that
independent agents continue to represent a major chunk of carriers' business. Hence it is
imperative for carriers to focus on enriching their relationship with Agents. L&T’s suite of
services enables insurance companies to achieve a 'Carrier of choice' status amongst agents.

The Agency Relationship Management Solution, Agency Point includes:

 Agency Portal
 Mobile Based Agency Management Solution
 Agency - Carrier Interface Solution
these services enable insurance carriers to retain its top agents, while developing an
attractive proposition to attract new agents.

L&T EmSys:

The channel of distribution is entirely corporate sales based, and project based, which is a
Zero Level Channel structure. The projects are acquired through Relationships and a few
dealers. The Distribution is entirely dependent on the Customers requirement.

The overseas offices of EmSys are located in USA, Europe and Japan along with a network of
Business Associates in various places.

Larsen & Toubro e-Engineering Solutions

This subsidiary focuses on providing engineering solutions using PLM technology. It

provides engineering services. It operates from off-shore engineering centres at Vadodara,
Chennai and Bangalore with onsite teams to cater to engineering requirements of global
clients, many of them Fortune 500 companies.
Larsen & Toubro Valves Business Group

The marketing network is supported by an experienced team of valve specialists. The

distribution is completely project based, and the teams develop relations with the
customer to meet requirements. It is a leading global supplier of industrial valves and
customized solutions for major Refinery, LNG, GTL, Petrochemical and Power
projects.

Larsen & Toubro InfoTech:

The channel of delivery is again a zero level structure, wherein a project is handled just like a
TCS or an Infosys to achieve maximum control and no Intermediaries.

PRICING STRATEGY

Price management is the disciplined method to understand the various cost components of
transaction and to enforce a process to eliminate unstructured decision, thereby lead to
improve the bottom line growth. Companies today are under great to increase the value for
their shareholder on one hand and to satisfy continuous demand for the customers on the other
hand.

Aggressive pricing (predatory pricing):

In business and economics, predatory pricing is the practice of selling a product or
service at a very low price, intending to drive competitors out of the market, or create barriers
to entry for potential new competitors. If competitors or potential competitors cannot sustain
equal or lower prices without losing money, they go out of business or choose not to enter the
business.

Biggest competitor of L&T is BHEL which takes part in all the bids of construction
deals. L&T’s aggressive pricing strategy not only outbid BHEL but other overseas players
also such as Chinese and Koreans, who are known for low pricing strategies.

Penetration strategy:
L&T acquired TAMCO switch gear in Malaysia. After the acquisition the switch gear
products were sold at a very low price so as to attain a significant market in Malaysia.

Grasim and L&T deal:

LNT and Grasim deal lead to increased consolidation in the cement industry. This deal
leads to increase in consolidation in the cement industry and considerable improvement in the
cement prices. Demand has been growing consistently and on the other there is less increase
in capacity. Demand growth, driven by construction demand such as roads and housing, was
over 8-9 per cent per annum over the medium term, lifting cement demand to 125 million
tonnes in FY05 from the 107 million tonnes in FY03. As the giants have consolidated they
enjoyed monopoly to a certain extent and increased the cement prices to some extent.

Multinational players would become marginal players. In fact, the biggest MNC
player in India, Lafarge, had only a 3 per cent market share. Five Indian companies owned 55
per cent market share and the rest of the market were shared by 44 players of median capacity
of 1.2 million tonnes. Any potential player would have to make several acquisitions to gain
market shares comparable with the top Indian players.

Bid price
A bid price is the highest price that a buyer (i.e., bidder) is willing to pay for a good. It is
usually referred to simply as the "bid."

L&T has been engaged itself in several bids with one of the most successful being of
Rs 300 crore order for construction of the ductile iron spun pipe (DISP) plant of KIOCL Ltd,
earlier known as the Kudremukh Iron Ore Company Ltd, the public sector undertaking under
the ministry of steel and mines. KIOCL plans to set up a 100,000 tonnes per annum DISP
plant at Mangalore as part of its diversification. L&T emerged as the L1 bidder for the
project. The KIOCL board shortlisted L&T through a global bidding route for the proposed
project.

Waterfall Strategy
A popular strategy followed by L & T Ltd. Is the price waterfall strategy (also called Pocket
price waterfall). It is the set of prices, price adjustments and cost elements that defines how
list price gets to net price and how net price gets to net margin.

Price waterfall depicts the build up of L & T ltd’s engineering products prices from a base
price to the list price and then the discounts that are given to the dealers to get to the Invoice
price, the rebates terms, bonuses and other Discounts that affect the Pocket Price, the Pocket
margin based on Cost of Goods sold and the Net margin based on the other fixed costs.

The Price Waterfall Strategy shows the different prices that are included in the pocket price to
get to the dealers price for the L&T Ltd. Engineering and electrical products.