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VOLTAS: A JOURNEY FROM FAILURE TO MARKET LEADER

  Voltas is undoubtedly one of the most amazing brands in the Indian business ecosystem. If you look at the stock price of Voltas, you'll be astonished to see that it has shot up by a staggering 14,200%. From just over 6.93 rupees in 2000, it reached 995 rupees in 2022. So, an investment of a mere 10,000 rupees in Voltas in 2000 would be worth 14 lakh rupees today.

Most of us know Voltas as a Tata-backed market leader in the air conditioner market. But very few are aware that there was a time when Voltas was on the brink of shutdown. It went from being a market leader with a 40% market share in 1990 to a mere 6% market share in 2001. However, something incredible happened, and in the next 10 years, Voltas made an epic comeback, becoming a market leader once again for 10 consecutive years.

The question is, how did this failing brand transform into a market leader? What was its business strategy? And most importantly, what can future entrepreneurs and business students learn from Voltas' iconic revival?

This is a story that dates back to 1990 when India opened up its economy and giant foreign players like LG, Samsung, and Whirlpool entered the market. Voltas' market share started dropping, and the company faced significant challenges.

But then came the Big Bang strategy. To fix the tangible value of their products, Voltas partnered with the largest AC manufacturer in the world, Fedders International. This allowed them to manufacture ACs at a lower cost and offer competitive features like purification filters and energy-saving modes.

They also tapped into the untapped market below the 20,000 rupees range by partnering with manufacturing companies in China, Taiwan, and Malaysia. This allowed them to launch affordable ACs and transition customers from coolers to ACs.

Next, they focused on efficiency. After conducting thorough market research, they understood that customers were concerned about electricity bills. So, they engineered their ACs to bring down the electricity bill as close as possible to the acceptable golden number of 1,000 rupees.

To fix the perceived value, Voltas created a buzzword – "Intelligent Cooling." This term became synonymous with feature-loaded ACs, transforming the perception of Voltas from an outdated product to an intelligent air conditioner.

Their masterstroke was the Voltas All-Weather AC, catering to diverse climatic conditions across India. They created custom advertisements for different regions, resonating with the problems customers faced due to varying climates.

The relentless pursuit to build a great tangible and perceived value, backed by lifelong service support throughout India, led to Voltas' phenomenal growth. From just 6% market share in 2001, it became a market leader with 18.3% share in 2012 and maintained its leadership position for 10 years with a market share of 25.4% as of January 2022.

The key business lessons to learn from Voltas' rise are:

  1. Products must deliver both tangible and perceived value to be successful.
  2. Conduct thorough market research, categorize problems, and solve them accordingly.
  3. For D2C brands, customize ads for different audiences to maximize conversion.

The story of Voltas' iconic revival teaches us the importance of innovation, understanding customer needs, and constantly evolving to stay relevant. With the right strategies and relentless dedication, any failing brand can transform into a market leader, just like Voltas did.

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