marico proj

53
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.

Upload: shimoni-mehta

Post on 22-Aug-2014

364 views

Category:

Documents


9 download

TRANSCRIPT

Page 1: Marico Proj

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: Marico Proj

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: Marico Proj

PRODUCTS

Saffola Hot Oil

Hair & Care Nihar Shanti Badam Amla

Mediker Caivil

Page 4: Marico Proj

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: Marico Proj

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: Marico Proj

SWOT ANALYSIS

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

are included in the SWOT analysis;

Page 7: Marico Proj

SWOT Analysis of Marico Ltd.Strengths1.Understanding of Indian Consumer behavior in the hair oil segment.2.Rural Maket seach. 3.Large distribution network all over india.Weakness1.Not strong within the shampoo segment, having hardly any share.2.Not having any antidandruff hair oil whose market potential is worth 25% of the total oil market in india.Opportunities1.Need to concentrate within the various other market potential zones like hair shampoo, hair colorants etc.Threats1.Competition from the diverse players present in the market can cause loss of market share. "SWOT Analysis of Marico India"

Page 8: Marico Proj

Various Environmental Analyses

Strategic Advantage Profile (SAP)

IntroductionA 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: Marico Proj

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

identifying 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: Marico Proj

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: Marico Proj

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: Marico Proj

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

Legal

minimum wage laws

environmental protection laws

worker safety laws

union laws

Sunday closing laws

municipal licenses

laws that favour business investment

Page 13: Marico Proj

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

quality of labour available

stability of labour supply

wage expectations

employee turn-over rate

strikes and labour relations

educational facilities

Material suppliers

quality, quantity, price, and stability of material inputs

delivery delays

proximity of bulky or heavy material inputs

level of competition among suppliers

Page 14: Marico Proj

Service providers

quantity, quality, price, and stability of service facilitators

special requirements

Socio-cultural

Demographic factors such as:

population size and distribution

age distribution

education levels

income levels

ethnic origins

religious affiliations

Attitudes towards:

materialism, capitalism, free enterprise

individualism, role of family, role of government, collectivism

role of church and religion

consumerism

environmentalism

importance of work, pride of accomplishment

Cultural structures including:

diet and nutrition

housing conditions

Page 15: Marico Proj

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

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

3 - - +3 - -

Page 16: Marico Proj

electrical power

Industrial

productivity 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. 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

Page 17: Marico Proj

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

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

Page 18: Marico Proj

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

c. Industrial relations

d. Quality and motivation of

personnel

-

-

-

-

-

-

0

-

1

2

-

1

THE BOSTON CONSULTING GROUP’S GROWTH-SHARE

MATRIX (BCG)

Page 19: Marico Proj

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 20: Marico Proj

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 21: Marico Proj

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 not generate enough cash

Page 22: Marico Proj

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 23: Marico Proj

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 24: Marico Proj

HIGH AVERAGE WEAK

HIGH 1 2 6

MEDIUM 3 4 7

LOW 5 8 9

Medium LowHighM

ediu

mH

igh

Low

Build Hold Harvest

Bus

ines

s U

nit P

ositi

onIndustry Attractiveness

Page 25: Marico Proj

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.

Page 26: Marico Proj

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

products is strong to compare to SAFFOLA.

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 27: Marico Proj

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 28: Marico Proj

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:

Page 29: Marico Proj

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.

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

Page 30: Marico Proj

Meso Glow

Skin Lightening Peel

Kaya Advanced Facial

Kaya Express Glow

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.

Page 31: Marico Proj

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.

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 32: Marico Proj

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 33: Marico Proj

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

Page 34: Marico Proj

Expansion through cooperation

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 35: Marico Proj

VALUE CHAIN ANALYSIS OF MARICO

ConceptA 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.

Page 36: Marico Proj

ActivitiesThe 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.

Profit Profit margin

Margin

Administrative Infrastructure Management

Human Resource Management

Technology (R&D)

Procurement

Inbound Operation Outbound marketing services

logistics logistics & sales

Support activities

Page 37: Marico Proj

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

Page 38: Marico Proj

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.

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.

MARICO’s Supply Chain

Page 39: Marico Proj

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.

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.

Factory + Subcontractor

Distributor

Retailer

Depot

Super Distributor

Stockist

RawMaterialVendors

DirectDistributorsPlants

RDC

Depots

SuperDistributors

Retailer

Stockists

30 depots

6 RDCs (regional distribution centres)

Total > 1100

Secondary Sales

Primary Sales

Page 40: Marico Proj

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

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.

Page 41: Marico Proj

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.