Eveready Industries: The Magic Lamp that Changed the Fortunes

Abstract

This case portrays the experimental foray of Eveready Industries Limited in a new line of business when faced with dire consequences of survival of its core battery business. The battery business was severely hit because of cheap Chinese imports and from a position of domestic market leader, Eveready saw its position untenable during 2006 to 2008. Mr. Khaitan the Vice Chairman & Managing Director of Eveready Industries Ltd. felt that the company's problems were much deeper. On top of its falling domestic demand, the company did not have the license to sell Eveready batteries in many overseas markets. Thus born out of sheer necessity of survival, Eveready Industries made its experimental foray of entering the LED lantern (lamp) business. This entry into a new business could, on one hand, create a new growth opportunity for catering to the BOP customer in an emerging country like India. On the other hand, these lamps would need batteries to operate on, which would create a further traction for his existing battery business. Further, if it could be provided cheaper than traditional kerosene lamps, it would fill a significant void in the market. This experimental foray led to unprecedented success which changed the fortunes of the company from 2009 onwards. Built on the philosophy of giving better light at a lower monthly cost than running kerosene lanterns, this experimentation was a huge success. What then were the challenges and pitfalls faced by Eveready Industries in taking an alternative growth path? What were the strategies adopted in revitalizing the Company? It is quite rare in the Indian market that a consumer product can catch such a customer fancy in such a short span of time as with the LED lamps. However challenges remain as rechargeable batteries and solar lanterns could be a potential threat to the LED lantern. This case describes the innovation in the business model and leadership issues during a crisis, which resulted in revitalization of the company.