Understanding the source of sustained competitive advantage of TTK Prestige Group

Abstract

Mr. Chandroo Kalro, managing director of India’s leading pressure cooker company, looked comfortable and relaxed as he discussed on the planned ~50-70 product launches the company was about undertake this fiscal year. Some of these were part of the brand new Prestige Home cleaner range that the company had introduced recently while several others were upgrades/variants to the existing range of kitchen durables the company sold. The last 10 years had seen the company’s topline grow at a very strong ~21% CAGR. iThe company had successfully transitioned itself from a company focused on pressure cookers and induction cook tops to an entire gamut of kitchen durables. These products were sold via a large national distribution network of dealers and included premium franchisee stores. The vision was to “own the kitchen” via leveraging on the strong brand equity the company had built with the women of the household over the last several decades. Its advertisement jingle- “Jo biwi se kare pyaar, woh Prestige se kaise kare inkaar” had strong recall nationally. However, it had not been an easy ride. The initial challenge it faced was in increasing penetration of pressure cookers in Indian households in the 1960’s-1980’s when safety element with regard to cookers was still a huge concern. Further in 2003, when it attempted a huge maneuver and launched the Prestige SMART range of products after meticulous planning and market research, the range flopped. The company suffered losses and relationships with the distributors went sour. However, the story post that has been one of strong grit and determination. From sales turnover of ~Rs.100 crores in FY ‘02, the company closed FY ’16 with sales of ~INR 1,500 crore. Its stock price has zoomed from Rs.300 to Rs.4800 in the same period, an annualized return of ~22%. iiThe journey has truly been an interesting one.