1 AIT Asian Institute of Technology

Framework to analyze core and non-core businesses : a case study of Bharat Heavy Electricals Limited (BHEL), India

AuthorPurumandla, Suman Kumar Reddy
Call NumberAIT Proj. no.SM-07-03
Subject(s)Bharat Heavy Electricals Limited (India)
NoteA project study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration in Management of Technology
PublisherAsian Institute of Technology
AbstractThis project presents a comprehensive framework to evaluate different businesses (new and existing) to arrive at the right mix of businesses to achieve Bharat Heavy Electricals Limited's (BHEL) business objectives. It involves a thorough analysis including the most important Factors of industry and businesses and Bharat Heavy Electricals Limited's capabilities to determine the best business among all the alternatives. The primary aim of this framework is to address the most fundamental question of a corporation: What businesses should the corporation be in? The main objective of this project work is to present Bharat Heavy Electricals Limited (BHEL) a framework by which it can analyze its core and non-core businesses. To achieve the main objective, many sub objectives were performed. A clear understanding of the company as a whole is made and diagnosed for its business making capabilities. Later for the framework, a business assessment filter and a business portfolio assessment matrix is designed and tailored to meet the requirements of Bharat Heavy Electricals Limited Firstly, a detailed study was made to understand the corporation as a whole, its businesses, products and activities. Further study was made to know Bharat Heavy Electricals Limited's contribution to various sectors like power transmission and distribution, industry and transportation. In this process, the strengths, weaknesses, opportunities and threats of Bharat Heavy Electricals Limited were identified for further use as an interpretative filter to reduce widespread information to manageable terms. Secondly, Business Assessment Filter (BAF) constituting of seven filters was designed to screen out business ideas which are prima facie not of interest to Bharat Heavy Electricals Limited to achieve its objectives. The basic idea behind applying Business Assessment Filter to the new business idea is to weed out any such business which does not suit with the roots and structure of Bharat Heavy Electricals Limited. This is to come to a stage where the business chosen is of strategic importance to Bharat Heavy Electricals Limited and the application of Business Portfolio Assessment Matrix is useful. Now to evaluate each new and existing businesses of Bharat Heavy Electricals Limited for its core capabilities, a model based on industry attractiveness and business strengths is designed. It is called as Business Portfolio Assessment Matrix (BPAM). Business Portfolio Assessment Matrix is modeled from the G. E Business Portfolio Matrix and modified as per the needs of Bharat Heavy Electricals Limited to analyze its Businesses on two corporate dimensions: industry attractiveness and business strength. Individual factors were identified for industry attractiveness and business strength and a detailed assessment procedure was given for assigning weights and rankings to the factors. A model template and nine-cell grid matrix was also designed for the interpretation of weights and ratings to check for business potential. The framework is applicable to make a comparative study between different businesses, to evaluate in which businesses Bharat Heavy Electricals Limited should be in and what new businesses Bharat Heavy Electricals Limited should select. Thus a proper application of the framework will enable Bharat Heavy Electricals Limited to identify its core and non-core businesses.
Year2007
TypeProject
SchoolSchool of Management (SOM)
DepartmentOther Field of Studies (No Department)
Academic Program/FoSMaster of Business Administration (MBA) (Publication code=SM)
Chairperson(s)Kauranen, Ilkka
Examination Committee(s)Donyaprueth Krairit ;Singha Chiamsiri
Scholarship Donor(s)AIT Fellowship
DegreeProject (M.B.A.) - Asian Institute of Technology, 2007


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