bpsm marico

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INTRODUCTION Marico is a leading Indian Group in Consumer Products & Services in the Global Beauty and Wellness space. Marico's Products and Services in Hair care, Skin Care and Healthy Foods generated a Turnover of about Rs. 23.9 billion (about USD 478 Million) during 2008-09. Marico markets well-known brands such as Parachute, Saffola, Sweekar, Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal, Kaya, Aromatic, Fiancée, Hair Code, Caivil, Code 10 and Black Chic. Marico's brands and their extensions occupy leadership positions with significant market shares in most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti- lice Treatment, Premium Refined Edible Oils, niche Fabric Care etc. Marico is present in the Skin Care Solutions segment through Kaya Skin Clinics (101 in India, Middle East and Bangladesh) and its soap franchise.

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Page 1: BPSM MARICO

INTRODUCTION

Marico is a leading Indian Group in Consumer Products & Services in the Global

Beauty and Wellness space. Marico's Products and Services in Hair care, Skin Care

and Healthy Foods generated a Turnover of about Rs. 23.9 billion (about USD 478

Million) during 2008-09. Marico markets well-known brands such as Parachute,

Saffola, Sweekar, Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal, Kaya,

Aromatic, Fiancée, Hair Code, Caivil, Code 10 and Black Chic. Marico's brands and

their extensions occupy

leadership positions with significant market shares in most categories- Coconut Oil,

Hair Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible Oils,

niche Fabric Care etc. Marico is present in the Skin Care Solutions segment through

Kaya Skin Clinics (101 in India, Middle East and Bangladesh) and its soap franchise.

Marico's branded products are present in Bangladesh, other SAARC countries, the

Middle East, Egypt, Malaysia and South Africa. The Overseas Sales franchise of

Marico's Consumer Products (whether as exports from India or as local operations in

a foreign country) is one of the largest amongst Indian Companies and is entirely in

branded products and services.

Page 2: BPSM MARICO

HISTORY

The company was originally a join venture between a Lever group company

and Nissin of Japan, and its products were distributed through HLL's

channels.

In 1988 The Company was incorporated on 13th October, under the name of

Marico Foods Ltd. It obtained the Certificate of commencement of business

on 22nd November.

In 1989 The name of the Company was changed to Marico Industries Limited

w.e.f. 31st October.

In December, the Company entered into an agreement with M/s. Rasoi

Industries Limited for purchase of its unit located at M.I.D.C Industrial Estate,

Jalgaon.

Saffola won the Most Outstanding `Brand of the Year' Award instituted by the

Advertising Club of Mumbai in 1993.

In March 1996, the Company made a fresh issue of 10,00,000 equity shares

of Rs.10/- each, at a premium of Rs.165/- per share, simultaneously with an

offer for sale by the promoters of 26,25,000 equity shares of Rs.10/- each, at

a premium of Rs.165/- per share.

In 2002 Marico Industries Ltd has informed BSE that the Board approved the

Issue of bonus redeemable preference shares of aggregate face value of Rs

290 million. Ratio -- 1:1 on equity enhanced after bonus issue of equity

shares made by the Board on April 18, 2002 and approved by shareholders

on July 18, 2002. The rate of dividend is 8% p.a.Increase in authorised share

capital of the Company from Rs 300 million to Rs 600 million.

Marico acquires HLL`s Nihar for Rs 216 cr in 2006

In 2007 Marico Ltd has appointed Mr. Anand Kripalu as an Additional Non-

Executive Director on the Board of Directors of the Company.

Page 3: BPSM MARICO

PRODUCTS

Saffola Hot Oil

Hair & Care Nihar Shanti Badam Amla

Mediker Caivil

Page 4: BPSM MARICO

VISSION AND MISSION

'COME WIN' ---- their vision and mission is captured in this acronym, which when

bifurcated means the following: -

Consumers: For they are the reason we exist.

The primary focus of our efforts will be to not only understand what adds greatest

value to the consumer but also change and reinvent ourselves if need be. We will

translate the consumer's needs and desires into marketable products and an ever-

expanding base of loyal consumers, with speed and a quality of response that

surpasses the competition.

Membership: For a sense of ownership empowers us.

Wholesome membership is when a person brings his/her entire being into the

organization. It also gives each member a role in articulating and shaping the destiny

of the organization, which in turn, builds commitment and ownership.

Page 5: BPSM MARICO

Excellence: For it unleashes our potential.

We will focus on policies and practices where people produce consistently superior

performances and where people are encouraged to discover their untapped

potential.

Wealth: For on it hinges our growth.

All our efforts must culminate in the creation of wealth. We will do so by continuously

adding value in everything we do through a variety of methods. We will use sources

productively, eliminate waste, reduce cycle times and costs and enhance the

consumer base.

Innovation: For it gives wings to ideas.

The future of our organization rests on our willingness to experiment, push in new

and untested directions, think in uncommon ways and take calculated risks.

Continuous improvement should be a part of everyday work. We acknowledge that

failure is inherent in any new initiative. We will commit resources for experimentation

and invest in processes for reviewing and sharing of learning.

Marico's Goals and objectives (which they wish to achieve by 2010)

We commit ourselves to improving the quality of people's lives in several parts of the

world, through branded fast moving consumer products and services.

Page 6: BPSM MARICO

SWOT ANALYSIS

Before going to the Marico Company’s SWOT Analysis we must understand which

things are included in the SWOT analysis;

Page 7: BPSM MARICO

SWOT Analysis of Marico Ltd.

Page 8: BPSM MARICO

Various Environmental Analysis

Strategic Advantage Profile (SAP)

Introduction

A competitive advantage is an advantage over competitors gained by offering

consumers greater value, either by means of lower prices or by providing greater

benefits and service that justifies higher prices.

Concept of Competitive Advantage

"Competitive advantage exists when there is a match between the distinctive

competencies of a firm and the factors critical for success within its industry that

permits the firm to outperform competitors."

It concludes, then, that competitive advantage is externally focused while

organisational competence is internally focused. Therefore, an organisation's

competence does not automatically lead to competitive advantage. This

phenomenon can be explained by two situations:

1. The core competence of the organisation may not be of any importance to the

industry in which the organisation is operating. There are numerous examples

of this phenomenon; organisations diversifying into non-core competence

areas, failing therein and divesting such business. Metal Box, having core

competence in packaging materials, diversified into bearing and had to divest

it, and so on.

2. Even if core competence has relevance in the industry segment, other

competitors may have the same strength and the particular organization may

not have any competitive advantage. What becomes, then, important for the

organization is to have relatively greater strength in that important factor than

its competitor, For example, two competitors may enjoy low manufacturing

costs; but one with the lower manufacturing costs has a competitive

advantage.

Page 9: BPSM MARICO

Competitive Advantage Profile: A Case of MARICO

Marketing Factors

India’s fast moving consumer goods (FMCG) sector is the fourth largest

sector in the economy of India with a total market size in excess of US$ 13.1

billion.

Many giant players, both foreign as well as domestic, are competing in the

market with a view to capture it.

Marico Company a leading Indian FMCG Company having excellent

distribution channel and deep rural reach in India.

Marico and especially for having efficient distribution channel, Satisfaction

Level of Retailers on Various Products as well as other micro Parameter's

plays a vital role indentifying the flaws and merits of Marico.

Renowned Brands like Parachute, Saffola, and Kaya Skin Clinics.

Brands – quite powerful.

Strong in inventory control (28 days).

Physical distribution for superior to competitors.

Production Factors

Size advantages in relation to competitors.

Finesse in production planning, scheduling, and matching with marketing

requirements.

In house production – no outsourcing – high reliability suppliers – superior

quality assurance.

India and foreign production location – spread benefit.

Human resources high calibre.

Finance Factors

A Turnover of about Rs.13.6 billion (about USD 380 Million) during 2008-09.

Cash rich.

CAGR of 13% in turnover, 15% in profits - over last 5 years

Page 10: BPSM MARICO

Competitive Advantage Profile: A Case of MARICO (Descriptive

Form)

Capability Factors Competitive Strengths & Weakness

Finance High cost capital, reserves & surplus

Marketing Various Products, Domestic and Foreign market

gainer

Operation P&M excellent – parts & components available

personnel Quality management & personnel par with

competition

Page 11: BPSM MARICO

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE (ETOP)

Environmental scanning usually refers just to the macro environment, but it can also

include industry, competitor analysis, marketing research (consumer analysis), new

product development (product innovations) or the company's internal environment.

Macro environmental scanning involves analysing:

Economy

Government

Legal

Technology

Potential Suppliers

Socio-cultural

Page 12: BPSM MARICO

Economy

GDP per capita

economic growth

unemployment rate

inflation rate

consumer and investor confidence

inventory levels

currency exchange rates

merchandise trade balance

financial and political health of trading partners

balance of payments

future trends

Government

political climate - amount of government activity

political stability and risk

government debt

budget deficit or surplus

corporate and personal tax rates

payroll taxes

import tariffs and quotas

export restrictions

restrictions on international financial flows

Page 13: BPSM MARICO

Legal

minimum wage laws

environmental protection laws

worker safety laws

union laws

Sunday closing laws

municipal licenses

laws that favour business investment

Technology

Efficiency of infrastructure, including: roads, ports, airports, rolling stock,

hospitals, education, healthcare, communication, etc.

industrial productivity

new manufacturing processes

new products and services of competitors

new products and services of supply chain partners

any new technology that could impact the company

cost and accessibility of electrical power

Potential suppliers

Labour supply

o quantity of labour available

o quality of labour available

o stability of labour supply

o wage expectations

Page 14: BPSM MARICO

o employee turn-over rate

o strikes and labour relations

o educational facilities

Material suppliers

o quality, quantity, price, and stability of material inputs

o delivery delays

o proximity of bulky or heavy material inputs

o level of competition among suppliers

Service providers

o quantity, quality, price, and stability of service facilitators

o special requirements

Socio-cultural

Demographic factors such as:

o population size and distribution

o age distribution

o education levels

o income levels

o ethnic origins

o religious affiliations

Page 15: BPSM MARICO

Attitudes towards:

o materialism, capitalism, free enterprise

o individualism, role of family, role of government, collectivism

o role of church and religion

o consumerism

o environmentalism

o importance of work, pride of accomplishment

Cultural structures including:

o diet and nutrition

o housing conditions

Scanning these macro environmental variables for threats and opportunities requires

that each issue be rated on two dimensions. It must be rated on its potential impact

on the company, and rated on its likeliness of occurrence. Multiplying the potential

impact parameter by the likeliness of occurrence parameter gives a good indication

of its importance to the firm.

ETOP MATRIX OF MARICO COMPANY

Environmental

factors

Degree of importance

High Medium low

(3) (2) (1)

Degree of impact

High Medium low

± 3 ± 2 ± 1

Page 16: BPSM MARICO

Economic

Inflation rate

Economic

growth

Consumer and

investor

confidence

-

3

-

-

-

-

1

-

1

-

-3

-

-

-

-

+1

-

-1

Legal

Minimum wage

laws

Budget deficit

or surplus

Environmental

protection laws

-

3

-

2

-

-

-

-

1

-

+3

-3

-

-

-

+1

-

-

Technology

Cost and

accessibility of

electrical power

Industrial

productivity

3

3

-

-

-

-

+3

-

-

-2

-

-

ORGANISATIONAL CAPABILITY PROFILE (OCP)

OCP is a summarized statement which provides overview of strengths and

weakness in key results are as likely to affect future operation of the organisation.

Information in this profile may be presented in qualitative terms or quantitative terms.

Page 17: BPSM MARICO

Where the information is presented in qualitative terms, strengths and weakness

described in the form of narration. However these narrations do not show the degree

of strengths and weakness. Quantitative presentation of strengths and weaknesses

solves this problem. In the quantitative presentation, all the factors appraised are

assigned degree/values along a scale. Such values may be on 5 point scale with 5

denoting the highest value and 1 denoting the lowest value of strengths and

weaknesses. The values that are assigned to a factor are subjective depending on

the perception and judgment of appraisal. Such an exercise may run into several

pages depending upon the factors appraised.

After the preparation of OCP, the organization is in a position to assess its relative

strengths and weaknesses vis-a- vis its competitors. If there is any gap in any area,

suitable action may be taken to overcome that.

Financial capability factors of MARICO Company

Cash management

Centralized payment

Decentralized collection

Low investor confidence

Marketing capability factors of MARICO Company

Distribution channel

Wide variety of product

Low company image

Low promotion

Fixed price

Operation capability factors of MARICO Company

Plant location as per raw materials availability

Absorb imported technology

R & D system is so good

MIS system of operation and control system

Page 18: BPSM MARICO

Personnel capability factors of MARICO Company

Good personnel system

Good industrial relation with other company

Summarized form of OCP

OCP Weakness

(- 5)

Normal (0) Strengths

(+ 5)

Financial capability factors

a. Source of funds and cost

b. Usage of funds

c. Management of funds

-

-

-

-

0

-

3

-

2

Marketing capability factors

a. Product related

b. Price related

c. Promotion related

d. Distribution related

-

-1

-3

-

-

-

-

-

5

-

-

1

Operation capability factors

a. Plant location

b. Production system

c. Operation and control system

d. R & D system

-

-

-

-

0

-

-

-

-

2

3

5

Personnel capability factors

a. Personnel system

b. Organisational and employee

characteristics

-

-

-

-

1

2

Page 19: BPSM MARICO

c. Industrial relations

d. Quality and motivation of

personnel

-

-

0

-

-

1

THE BOSTON CONSULTING GROUP’S GROWTH-SHARE

MATRIX (BCG)

Page 20: BPSM MARICO

BCG Matrix Include;

1. Stars are high market share/high growth businesses. The preferred strategy is

growth.

2. Question Marks are low market share/high growth businesses. The preferred

strategies are growth for promising question marks and restructuring or

divestiture for the other question marks.

3. Cash cows are high market share/low growth business. The preferred

strategy is stability or modest growth.

4. Dogs are low market share/low growth businesses. The preferred strategy is

retrenchment by divestiture.

BCG MATRIX OF MARICO

Page 21: BPSM MARICO

STAR

It is represented by a SBU or a product having high relative market share and high

market growth rate. It need capital over and above its cash flow to maintain it’s

market share. However in may be self sustained in terms of cash flow when it is

established and beginning to mature ultimately it becomes cash cow, on maturity,

because it cannot absorb further cash. It cannot absorb further cash; it provides cash

for growing stars. It suggested Expansion Strategy for STAR

E.G. KAYA SKIN CARE AND PERACHUTS COCONUT OIL IN MARICO AND IN

THE INDUSTRY HLL AND GODREJ COMES IN THIS CATEGORIES.

These product is in STAR but there cash flow will be less it will be become cash cow because there use full all over the world.

Page 22: BPSM MARICO

QUESTION MARK

It represented by a SBU /Product having low relative market share and high market

growth rate I.E low market share in a growing market. It requires large cash due to

market growth, but generates less cash due to low market share.It requires

additional investment to increase it’s competitive advantage or divestment.

E.G NIHAR, SAFFOLA (FUNCTIONAL OIL) AND IN THE WHOLE INDUSTRY

DABUR COMES IN IT.

These product company given more advertisement. Because these product not more popular in the market. So company given more cash to these product.

CASH COW

It represent by a SBU/Product having high relative market share and low market

growth rate. It generates substantial cash over and above it’s investment

requirement. It may be a SBU/Product in maturity life cycle stage. It is not attractive

in long ran due to less market growth rate to meet the investment need of stars on

question marks, over heads and growth strategy is suggested.

E.G SAFFOLA (EDIBLE OIL), SILK N SHINE AND IN THE ABOVE EXAMPLE ITC

COMES.

These product market share is high but there market growth rate is low because there competitor is so much in market. In the market SAFFOLA OIL competitor is so much like as FORCHUN OIL , DARA OLI etc.

DOG

It represents a SBU/Product having low relative market share and low market growth

rate. It has very low competitive position due to high costs, poor quality ,poor

marketing etc.It also has low growth potential due to low market growth rate. It does

Page 23: BPSM MARICO

not generate enough cash even for its own continuity. So Retrenchment Strategy

usually by divestment or liquidation is suggested.

It may be in the declining stage of its life cycle. Government policy may retain a dog

artificially.

E.G MAHA THANDA AND IN THIS EXAMPLE MARICO COMES

These product in market so very people know and there marketing is so less to other

product of company.

This product competitor is NAVRAT COLL DABAR Etc.

GE NINE-CELL MATRIX McKINSEY & Co

This matrix follows two dimensions;

Page 24: BPSM MARICO

Industry Attractiveness

Market Size and growth rate

Industry profitability

Seasonality

Political Factors

Capital requirements etc.

Business Strength

Relative Market Share

Relative price, service

Knowledge of Customers & Markets

Financial Resources

Page 25: BPSM MARICO

HIGH AVERAGE WEAK

HIGH 1 2 6

MEDIUM 3 4 7

LOW 5 8 9

Page 26: BPSM MARICO

Cell 1:

It has high business strength and strong Industry attractiveness. It is suggested the

growth strategy. In long run other players may be attracted and Industry

attractiveness reduces.

E.G: Like as parachute is more attractiveness but now there competitors are so much but there attractiveness is same as earlier.

Cells 2:

It shows average business strength and high industry attractiveness. So it

suggested growth strategy by building up of business strength.

But if it does not happen it is dangerous.

E.G: Like as Parachute Advanced Oil attractiveness is high but there competition

of this product strength is average because in the market parachute Oil is sold. So

that here, only company change name. The product attractiveness is so much but

here product strength is average.

Cells 3:

It has High Business Strength and attractiveness is medium. Here growth Strategy suggested.

E.G: Like as NIHAR and SILK N SHINE strength is high but there attractiveness is

medium because their competitors is so much in these product.

Cell 4:

It has business strength is average and attractiveness is medium. It will be hold and

continue to earn. It say Suggested Stability Strategy.

E.G: Like as SAFFOLA (OIL) there both are average but in the market there are

many products is strong to compare to SAFFOLA.

Page 27: BPSM MARICO

Cells 5:

It has high business strength and Low attractiveness of Industry can grow by neither

vertical integration nor diversification where its strength can be utilized. Otherwise, it

should be continued to harvest profit.

Cells 6:

It has high attractiveness of industry but low business strength. It suggested stability

and growth for business strength. It may continue to earn in attractive industry or

improve its strength and grow or if it is not possible its divest.

Cells 7 & 8:

In the res zone suggest harvestmen or turnaround strategy .

Cells 9:

It is least attractive and weak, so immediate is suggested.

Page 28: BPSM MARICO

STRATEGIC BUSINESS UNIT

Marico’s Strategic Business Unit

Consumer Products Business:

Over the past 17 years, Marico has been continually improvising and building new

brands. Marico's Consumer Products Business houses well-known brands such as

Parachute, Saffola, Sweekar,Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal,

among others, which occupy leadership positions with significant market shares in

most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice Treatment,

Premium Refined Edible Oils, niche Fabric Care etc.

Every month, over 70 Million consumer packs from Marico reach approximately 130

Million consumers in about 23 Million households, through a widespread distribution

network of more than 2.5 Million outlets in India and overseas.

Page 29: BPSM MARICO

International Business Group:

The International Business Group of Marico operates in more than 20 countries

spread across Asia, Middle East and Africa and has manufacturing facilities in Egypt,

South Africa & Bangladesh.

The International Business group has witnessed phenomenal growth over the years

and contributes to 25% of Marico’s turnover. The company has full fledged

operations in Egypt, South Africa, Middle East and Bangladesh.

In addition, the International Business group is actively involved in creating

opportunities for future growth and has enabled our brands to be present in many

other markets across the globe.

Kaya:

Kaya Ltd (erstwhile Kaya Skin Care Ltd.) was an entrepreneurial leap of faith

marking Marico's entry into skin care solutions business. It was a true reflection of

uncommon sense for a company in hair care products to move, instead of merely

logical product extensions, straight into skin care services. It attempted to leverage

Marico's strengths in the Personal Care business and in-depth understanding of the

needs of the Indian consumer and her/his desire to enhance her/his natural beauty

with the best cosmetic dermatology procedures available internationally.

Page 30: BPSM MARICO

Kaya Ltd. has been focused on meeting the emerging needs of the modern day

consumers by providing useful and effective services in the beauty and wellness

space. The pioneering effort has been in the area of skin care with Kaya Skin Clinic.

Over the last 7 years Kaya Skin Clinic has refined the standards and

professionalisms of the skin care industry through innovative, world class treatments

and services that have been tailor made to suit Indian skin.

Kaya Skin Clinic

The philosophy at Kaya is governed by the single value of placing the customer first

at all times. The emphasis, therefore, is to offer personalized, world-class skincare

treatments and services, most suited for Indian skin, in a zen like, state-of-the-art

clinic. Since its first prototype in Bandra in 2002, Kaya Skin Clinics has grown at an

unprecedented pace, with over 100 clinics in India, Middle East and Bangladesh.

Kaya Services

Kaya has a host of services that will help you attain, regain, preserve and protect the

intrinsic beauty of your skin. All this is offered in serene, zen like ambience, under

the reassuring care of dermatologists and experienced skin practitioners, to aid you

to easily look your best, always.

Skin Beauty Services:

Skin polishing and brightening

Kaya Glow

Kaya Back shine

Meso Glow

Skin Lightening Peel

Kaya Advanced Facial

Kaya Express Glow

Page 31: BPSM MARICO

BUSINESS LEVEL STRATEGIES

1. Cost Leadership Business Level Strategy

In company attains there competitive advantages & Increased their market share by

offering products and services. Company offering product and services having the

same utility, utility features as competitors’ products and services. Company

substitute products and services; but the price lower than their competitors. Because

of its core competence in engineering, design, manufacturing, distribution etc.When

there is price elasticity of demand i.e. positive co-relation between price reduction

and demand.

Cost leadership is achieved by Marico Company

Early entry in business.

Accurate demand forecasting.

High capacity utilization.

High level of standardization of products and uniform services packages.

Aiming at average customer by giving generalized set of utilities & thereby

attracting more customers.

Conditions For Cost Leadership Being Successful Are As

Price based competition is so severe that cost becomes an important factor.

Page 32: BPSM MARICO

Buyers are price sensitive and low price attracts more buyers.

Buyers are many and have bargaining power for price reduction

There are very few ways of differentiation and it is not important to customers.

Advantages of Cost Leadership Are As Following:

In company it protection against competition if a company make lower structure of products.

There is less effect because powerful suppliers bargain for high price so that such price rise to better absorbed in low cost structure.

It serves as entry barrier to new company which can not produce at lower price.

Company has so many products so that company use these strategy for there

product market share increase in market. If company not use these strategy for there

product company not sell there product in market because company’s so many

competitors. So many products growth is so much as compare to there anther

products.

Page 33: BPSM MARICO

2. Differentiation Business Level Strategy

Company make such product/services is differentiating from there competitors.

Which are not offered by competitors. Company see the which customers are ready

& willing to pay premium price which can compensate additional cost of

differentiation.

Company Make Differentiation at These Point

By enhancing the quality i.e. offering stronger, bigger, better, vastly, improved

products.

By enhancing versatility, safety, utility and convenience for customers to

match their tastes and preferences.

By changing size, weight, materials. Accessories of products i.e. from of

products.

By style improvement by increasing aesthetic appeal, by symbols, by media,

by atmosphere, by new packaging etc.

By improving the quality of inputs i.e. raw materials.

By better durability, reliability, design, process of manufacturing, modern,

technology, collaboration with valued partner, unique location etc.

By lower operational cost of using the products/services.

By offering complete range of products /services etc.

By coverage, expertise and performance of channels.

Company make product for Skin is KAYA Skin Care these is so much

differentiation to other.

Company make for night crème is PARACHUTE NIGHT REPAIR CREME.

Page 34: BPSM MARICO

GROWTH STRATEGY

Growth is a way of life. Almost all organizations plan to expand. This strategy is

followed when an organization aims at higher growth by broadening its one or more

of its business in terms of their respective customer groups, customers functions,

and alternative technologies singly or jointly – in order to improve its overall

performance.

There are five types of expansion (Growth) strategies

Expansion through concentration

Expansion through integration

Expansion through diversification

Expansion through cooperation

Page 35: BPSM MARICO

Growth through Acquisitions

Marico has acquired five companies in the last 18 months to expand its product lines and business. The company acquired a number of brands such as Aromatic soap in Bangladesh, Manjal toilet soap and Nihar hair oil in India, and Fiancée hair care brand in Egypt. The Ready Group's Fiancée hair care brand has captured 20 per cent of the Egyptian market. Marico is leveraging the popularity of the Fiancée brand to expand its business in Egypt and other parts of the Arab world.

Page 36: BPSM MARICO

VALUE CHAIN ANALYSIS OF MARICO

Concept

A value chain is a chain of activities for a firm operating in a specific industry. The

business unit is the appropriate level for construction of a value chain, not the

divisional level or corporate level. Products pass through all activities of the chain in

order, and at each activity the product gains some value. The chain of activities gives

the products more added value than the sum of added values of all activities. It is

important not to mix the concept of the value chain with the costs occurring

throughout the activities.

Activities

The value chain categorizes the generic value-adding activities of an organization.

The "primary activities" include: inbound logistics, operations (production), ,

marketing and sales (demand), and services (maintenance). The "support activities"

include: administrative infrastructure management, human resource management,

technology (R&D), and procurement. The costs and value drivers are identified for

each value activity.

Page 37: BPSM MARICO

Profit Profit margin

Margin

Administrative Infrastructure Management

Human Resource Management

Technology (R&D)

Procurement

Inbound Operation Outbound marketing services

logistics logistics & sales

Primary activities

Primary activities

Support activities

Support activities

Page 38: BPSM MARICO

Primary activities of MARICO

Inbound logistics

These are the activities concerned with receiving the materials from suppliers,

storing these externally sourced materials, and handling them within the firm.

Here goods are received from a company's suppliers.

They are stored until they are needed on the production/assembly line. Goods

are moved around the organization.

MARICO purchase their raw material from all around the world.

In order to maximize their availability of raw material MARICO maintain good

relationship with their suppliers.

MARICO use JIT (Just in Time) approach for handling of raw material.

Operations

These are the activities related to the production of products and services. This area

can be split into more departments in certain companies. For example, the

operations in case of a hotel would include reception, room service etc.

This is where goods are manufactured.

Operations could include organizing the parts to make final FMCG Product.

MARICO are known for their reliability which comes from efficient operations.

Outbound logistics

These are all the activities concerned with distributing the final product and/or

service to the customers. For example, in case of a hotel this activity would entail the

ways of bringing customers to the hotel.

The goods are now finished, and they need to be sent along the supply chain

to wholesalers, retailers or the final consumer.

MARICO manage their Distributor and Super Distributor in different rural and

urban area.

MARICO make their product easily assessable.

Page 39: BPSM MARICO

Marketing and sales

This functional area essentially analyses the needs and wants of customers and is

responsible for creating awareness among the target audience of the company about

the firm’s products and services. Companies make use of marketing communications

tools like advertising, sales promotions etc. to attract customers to their products.

MARICO given TV ads and magazine for a marketing.

This area focuses strongly upon marketing communications and the

promotions mix.

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MARICO’s Supply Chain

Service

There is often a need to provide services like pre-installation or after sales service

before or after the sale of the product or service.

This includes all areas of service such as final checking, after-sales service

Like quality, quantity, packaging, weight etc..

MARICO values their customers.

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Support activities of MARICO

Procurement

This function is responsible for purchasing the materials that are

necessary for the company’s operations. An efficient procurement

department should be able to obtain the highest quality goods at the

lowest prices.

This function is responsible for all purchasing of goods, services and

materials.

The aims to secure the lowest possible price for purchases of the highest

possible quality.

MARICO will be responsible for outsourcing and e-Purchasing (using IT and

web-based technologies to achieve procurement aims).

Human Resource Management

This is a function concerned with recruiting, training, motivating and rewarding the

workforce of the company. Human resources are increasingly becoming an

important way of attaining sustainable competitive advantage.

Employees are an expensive and vital resource. MARICO manage recruitment and

selection, training and development, and rewards and remuneration. MARICO

consider their employees as HUMAN CAPITAL. Equal support comes from our HRD

team, which expends its energies, formulating and building strategies to build a

stable and high - talent organisation. The innovations and the quest for excellence at

Marico continue unabated. Even as the success stories continue, the focus from the

consumer never shifts.

Toyota motors uses following techniques to retain their employs

Recruitment

Selection

Training and development

Compensation

Maintenance

Page 42: BPSM MARICO

Technology Development

This is an area that is concerned with technological innovation, training and

knowledge that is crucial for most companies today in order to survive.

Technology is an important source of competitive advantage.

Companies need to innovate to reduce costs and to protect and sustain

competitive advantage.

MARICO implemented production technology, Internet marketing activities,

lean manufacturing, Customer Relationship Management (CRM), and many

other technological developments.

Firm Infrastructure

This includes planning and control systems, such as finance, accounting, and

corporate strategy etc.

This activity includes and is driven by corporate or strategic planning.

MARICO implemented Management Information System (MIS) and other

mechanisms for planning and control in different departments.