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Strategic management

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  • ST. JOSEPHS COLLEGE OF BUSINESS ADMINISTRATION

    18 Residency Road, Bangalore 560025

    Emami Limited

    Module 1 & 2

    Strategic Management

    Submitted by - Group B5

    Aayushi Singh, 13041

    Mudassir Sharieff G M, 13063

    Neenu Varghese, 13064

    Pratik Porwal, 13070

    Ruben Barreto, 13074

  • Group B5, II PGDM

    Emami Limited 2

    Table of Contents Introduction .......................................................................................................................... 3

    Vision .................................................................................................................................... 3

    Mission .................................................................................................................................. 3

    Competitive structure of the industry ................................................................................. 4

    Competitive position of the company ................................................................................. 4

    Competiveness and Position of rivals ................................................................................ 6

    Major Competing companies in FMCG segment ................................................................ 6

    Drivers for Growth ................................................................................................................ 7

    SWOT Analysis ..................................................................................................................... 7

    Key Success Factors Emami ............................................................................................ 8

    Strategic Approach .............................................................................................................. 8

    Approach for top line growth - Sales .......................................................................................... 8

    Approach for bottom line growth - Profits ................................................................................ 8

    Porters 5 Forces Model Analysis ....................................................................................... 9

    External Factor Evaluation Matrix EFE Matrix ................................................................10

    Internal Company Analysis .................................................................................................10

    Competition Analysis ..........................................................................................................12

    Financial analysis ................................................................................................................12

    Ratio based analysis ...........................................................................................................12

    Strategic Formulation SWOT analysis ............................................................................14

    Strategic Formulation BCG Matrix ..................................................................................14

    Competitive Advantages of Emami ....................................................................................15

    Business model and Value Proposition .............................................................................15

    Business Model ...................................................................................................................15

    Value Creation .....................................................................................................................16

    Strategies in action .............................................................................................................17

    Future Prospects .................................................................................................................19

    Projections ...........................................................................................................................20

    Projected Income Statement for next 3 years ...................................................................20

    Conclusion ...........................................................................................................................22

    Bibliography ........................................................................................................................22

  • Group B5, II PGDM

    Emami Limited 3

    Emami Limited

    Introduction

    Emami Limited is one of the leading and fastest growing personal and healthcare

    businesses in India, with an enviable portfolio of household brand names such as

    BoroPlus, Navratna, Fair and Handsome, Zandu Balm, Mentho Plus Balm and Fast

    Relief.

    Established in 1974, Emami has a portfolio of over 250 products based on Ayurveda

    formulations. Emami Limited, the flagship company of the Group, recorded a turnover of

    Rs 1821 crore in the financial year 2013-14.

    Vision

    Making people healthy and beautiful naturally

    Mission

    To contribute whole heartedly towards the environment and society integrating all

    our stakeholders into the Emami family

    To make Emami synonymous with natural beauty and health in the consumers

    mind

    To drive growth through quality and innovation in products and services.

    To strengthen and foster in the employees, strong emotive feelings of oneness

    with the company through commitment to their future

    To uphold the principles of corporate governance

    To encourage decision making ability at all levels of the organization

    We would strive

    To be part of every household in the country

    To be a major player in every product category we venture into

    To be one of the most respected marketer in the country

    To be recognized as a global brand

  • Group B5, II PGDM

    Emami Limited 4

    Competitive structure of the industry

    The consumer products industry has been growing at a brisk pace in the past few

    years backed by robust economic growth and rising rural income. Growth drivers

    such as rapid urbanization, evolving consumer lifestyles and emergence of

    modern trade have shielded the industry from the slowdown.

    The industry is still urban-centric with majority of the goods being consumed by

    urban India. Metropolitan cities and small towns (population of 1-10 lakh) have

    been driving the FMCG consumption in urban India since 2002.

    Consumer goods are retailed through two primary sales channels - General

    Trade and Modern Trade. General trade comprising of the ubiquitous kirana

    stores is the largest sales channel forming 95% of overall retail sales.

    The implementation of the Goods and Services Tax (GST) is expected to benefit

    the sector immensely by reducing the overall incidence of taxation. GST aims to

    reduce the cascading effect by replacing a multitude of indirect taxes such as

    central excise, service tax, VAT and inter-state sales tax with a single GST rate.

    Competitive position of the company

    Emami Limited, the flagship company of the Rs 2000 crore Emami Group, is a leading

    player in the personal and healthcare consumer products industry in India. A jewel in

    the crown of the conglomerate, the company is a coveted Rs 700 crore business entity

    engaged in manufacture and marketing of health, beauty and personal care products

    that are based entirely on ayurvedic formulation.

    The companys financials show it has repeatedly outperformed the industry standards.

    Emami Ltd has maintained a CAGR of 25% over the last three years compared to the

    industry average of 16-17%.

    Understanding the human needs and fulfilling them by dint of technical research is a

    positive feature of Emami. This is being made possible by Himani Ayurveda Science

    Foundation (HASF) that generates the very best of Ayurveda formulations. The

    foundations unique range of healthcare products aptly caters to consumer needs. The

    world class quality control methods and processes maintained by HASF ensure

  • Group B5, II PGDM

    Emami Limited 5

    optimum utility of each ingredient. The foundation is completely engaged in constant

    innovation and pharmaceutical enhancements.

    Boroplus brand is the market leader in the antiseptic cream segment; the Navratna Oil

    is also in the pole position in the cool oil segment. Fair and Handsome is the pioneer in

    the fairness cream for men segment. Emamis products in different categories like cool

    oil, antiseptic cream, fairness cream for men, and the crme herbal hair pack have

    carved a niche for themselves in their respective segments.

    Boroplus has been selected as among the top 100 brands by the Brand Equity of The

    Economic Times. In 2006 and 2007, Navratna has been ranked the 6th Most Energized

    Indian Brand by the DY&R Brand Asset Valuator.

    Sona Chandi Chyawanprash, Himani Fast Relief, (Ayurveda pain relief ointment)

    Mentho plus (pain balm), Hairlife (crme herbal hair pack) and Emami Malai Kesar (cold

    cream) are also major players in their respective categories. Brand extensions have

    helped Emami consolidate its position in the market and also cater to varied consumer

    needs.

    Emami covers all the states with 28 depots across India. Its supply-chain management

    assumes immense significance which was aptly reflected through remarkable

    expansion in dealer-distribution network, outlets an