'A 40:60 ratio of direct, indirect sale will retain market share'

Structured cabling major Tyco Electronics is optimistic about the growing
stru-ctured cabling market that is now valued at Rs 350 crore. With a leading
market share, KK Shetty, Country Manager, Tyco is charting out an all-out
strategy to retain the position and is unwiring any possible chances for its
competitors to overtake the market share. For this, he believes in a mix and
match strategy of dealing directly and through channels. Sunitha Natti talk to
him about his future plans.

Tyco is more than a decade-old company now. How did the transformation
from being an unrecognized company to the present leadership position in the
structured cabling space happen?

We entered India through AMP in 1994 and introduced structured cabling in
1996. That was the time when AT&T was a reputed brand and channels were not
willing to take up our products. In 1999 Tyco International acquired AMP and
ever since it was renamed Tyco Electronics.

The exercise of directly educa-ting the customers was the key strategy that
was followed by AMP, which was later inherited by Tyco. We started approaching
customers indivi-dually and slowly started buil-ding our network directly to
where we are now.

What is Tyco's certification program all about?

Tyco's certification program will help employees of the cha-nnel network
to get accusto-med to the installation of networks in an appropriate way. It is
a weeklong program with an intake of 15 to 20 students for every batch. It will
basically help the students design the network, install and certify the fiber
optic ter-mination. People without such hands-on experience may tend to design a
complex net-work instead of a simple one.

The course at Tyco will cover various aspects of insta-lling a network and
would offer the trainees a hands-on approach as they will be provided with
necessary tool kits. This certification pro-gram is a first-of-its-kind in the
country and we have been getting good response from the channel network.

But with the sole lab facility being in Bangalore, we felt the need for such
facilities in the northern region too and hence we opened two facilities in
Delhi and Mumbai, early this year.

What other initiatives you take up to create awareness about your
products?

We conduct a daylong program for pre-sales per-sonnel every month giving
some quality suggestions ab-out product selling, what fea-tures should be
highlighted, the USP of the product, etc. And in every quarter, we con-duct
channel partner meet to keep the communication going.

We do have an Indian channel partner meet where in we take 120 to 140 channel
members to tour outside India. Besides, we do have some sort of tech-nology up
gradation programs for our end-customers on a periodic basis. We undertake such
programs in all the nine major cities in the country.

Which market segment do you operate in?

Tyco has got a wide range of products and as far as structured cabling
market is concerned, we have classified our market into three-high-end
customers serviced thro-ugh large partners like Wipro, IBM, etc, mid-segment
servi-ced through regional or local system integrators and finally the lower-end
segment servi-ced through stockists and resellers.

The market for structured cabling in India alone is around Rs 350 crore Tyco
has a market share of 46 percent, while our closest competitor Systimax has a
share of 32 percent and the rest being shared by other players like Krone, etc.
We are the market leaders in this space and are expanding and strengthening our
presence across geogra-phies. We expect to open our sales and marketing offices
in Chennai and Kolkata in the next couple of months and later opt for other
regions.

How do you intend to further strengthen your market presence?

Though we have a strong regional distribution model with a fairly good
channel net-work base to service all seg-ments of customers, having our own
sales office personnel will further help us in interact-ing with the channel
network and our end-customer base. Hence, we are setting up sales offices in
Chennai and Kolkata besides the existing offices in Bangalore, Hyderabad, Delhi
and Mumbai.

With this heightened appro-ach to expand and train the channel network, we
foresee an increase in direct sales. Presently, the company makes 70 percent of
the sales thro-ugh distribution, while 30 percent is through direct sales. We
expect this to be in the 40:60 ratio over a period of time.: