OF

Topic: Creative
Organization

Submitted To:
Submitted By:

Ms. Nandita Mittal

Komal Rana
M.B.A. IInd A
Roll No. 10149

Nirma
Nirma is a group of companies based in the city of Ahmedabad in western India that manufactures
products ranging from cosmetics, soaps, detergents, salt, soda ash, etc. Karsanbhai Patel, a well known
entrepreneur and philanthropist of Gujarat, started Nirma as a one-man operation. Today Nirma has
over 15000 employees and a turnover of over Rs. 3550 crores. In 2004, Nirma's detergent approached
800,000 tonnes one of the largest volumes sold in the world under a single brand 'NIRMA'.

Overview
Starting as a one-product, one-man outfit from a 100 sq ft (9.3 m2) room in 1969, Nirma became a very
successful company within three decades. The company had multi-locational manufacturing facilities,
and a broad product portfolio under an umbrella brand Nirma. The company's mission to provide,
"Better Products, Better Value, Better Living" contributed a great deal to its success.
Nirma successfully countered competition from HUL and carved a niche for itself in the lower-end of
the detergents and toilet soap market. The brand name became almost synonymous with low-priced
detergents and toilet soaps. However, Nirma realized that it would have to launch products for the

upper end of the market to retain its middle class consumers who would graduate to the upper end. The
company launched toilet soaps for the premium segment. However, analysts felt that Nirma would not
be able to repeat its success story in the premium segment.
In 2000, Nirma had a 15% share in the toilet soap segment and more than 30% share in the detergent
market. Aided by growth in volumes and commissioning of backward integration projects, Nirma's
turnover for the year ended March 2000 increased by 17% over the previous fiscal, to Rs. 12.17 bn.

Founder of Nirma
Karsanbhai Khodidas Patel (born 1945, Ruppur, Mehsana, Gujarat) is an Indian industrialist, founder
of the Rs. 2500 crore (USD 500 mn) Nirma group with major interests in detergents, soaps and
cosmetics. In 2005 Forbes listed his net worth as USD $640 million. He has interests in education, and
founded a leading pharmacy college (Nirma Institute of Pharmacy), leading engineering college,
(Nirma Institute of Technology). He is sometimes referred to as K. K. Patel.

Life
Born into a farmer family from north Gujarat, Karsanbhai finished his B.Sc. in Chemistry at age 21 and
worked as a lab technician, first in the New Cotton Mills, Ahmedabad, of the Lalbhai group and then at
the Geology and Mining Department of the state Government. In 1980, Karsanbhai set up Nirma,
(named after daughter Nirupama) selling detergent powder. This was an after-office business - the oneman company would bicycle through the neighborhoods selling handmade detergent packets door to
door. At a price of Rs. 3 per kg, (one third the price of leading detergents), it was an instant success.
After three years, Karsanbhai felt confident enough to quit his job. Later he said, "The lack of any such
precedent in my family made the venture fought with fear of failure. But farmers from North Gujarat

are known for their spirit of enterprise." Karsanbhai set up shop at small workshop in an Ahmedabad
suburb. The Nirma brand quickly established itself in Gujarat and Maharashtra.
The high quality and low price of the detergent made for great value. Fuelled by housewife-friendly
advertisement jingles, Nirma revolutionized the detergent market, creating an entirely new segment in
the economy for detergent powder. At the time, detergent and soap manufacture was dominated
by multinational corporations with products like Surf by Hindustan Lever, priced around Rs. 13 per kg.
Within a decade, Nirma was the largest selling detergent in India. Since production was labourintensive, Nirma also became a leading employer (employing 14,000 people 2004). Made without some
phosphates, Nirma was also somewhat more environment friendly.
After establishing its leadership in economy-priced detergents, Nirma entered the premium segment,
launching toilet soaps Nirma bath and Nirma beauty soap, and premium detergent Super Nirma
detergent. Ventures into shampoo and toothpaste were not as successful, but the edible salt Shudh is
doing well. Nirma beauty soap is one of the leading toilet soaps, behind Lifebuoy and Lux. Overall
Nirma has a 20% market share in soap cakes and about 35% in detergents. Nirma also has successful
operations in neighboring countries.
In 1995, Karsanbhai started the Nirma Institute of Technology in Ahmedabad, which grew into a
leading engineering college in Gujarat. An Institute of Management followed, with the entire structure
being consolidated under the Nirma University of Science and Technology in 2003, overseen by the
Nirma Education and Research Foundation. The Nirma labs education project, aimed at training and
incubating entrepreneurs, was launched in 2004.
Karsanbhais two sons and son-in-law are now at leading positions in the Nirma organization: Rakesh
K Patel (MBA) looks after procurement and logistics, Hiren K Patel, chemical engineer and MBA,
heads marketing and finance, while Kalpesh Patel is in human resources and Healthcare Industry
(Nirlife healthcare).

Awards

In 2001, Karsanbhai was awarded an honorary doctorate by Florida Atlantic University, recognizing his
exceptional entrepreneurial and philanthropic accomplishments.

In 1990, the Federation of Association of Small Scale Industries of India (FASII), New Delhi, awarded
him the 'Udyog Ratna' award. The Gujarat Chamber of Commerce felicitated him as an 'Outstanding

Industrialist of the Eighties'. He has served twice as Chairman of the Development Council for Oils,
Soaps and Detergents.

Patel has been conferred with Padma Shri Award for the year 2010. [2] The award will be formally
conferred by the President of India Mrs Pratibha Patil.

It was also announced on June 7, 2013 that he bought 40 crores six-seater chopper. After Adani Group
chairman Gautam Adani and Zydus group promoter Pankaj Patel, Karshanbhai is the third Ahmadabadbased industrialist to buy a chopper.

How the Business idea came?

Nirma became a huge success and all this was a result of Karsanbhai Patels entrepreneurial skills.
Karsanbhai Patel had good knowledge of chemicals and he came up with Nirma detergent which was a
result of innovative combination of the important ingredients. Indigenous method was used, and also
the detergent was more environment friendly.

How Business Was Expanded?

Karsanbhai Patel used to make detergent powder in the backyard of his house in Ahmedabad and then
carry out door to door selling of his handmade product. He gave a money back guarantee with every
pack that was sold. Karsanbhai Patel managed to offer his detergent powder for Rs. 3per kg when the
cheapest detergent at that time was Rs.13 per kg and so he was able to successfully target the middle
and lower middle income segment

Expansion of Business..
The company that was started in 1969 with just one man who used to deliver his product from one
house to the other, today employs around 14 thousand people and has a turnover of more than $ 500
million. In 2004 Nirmas annual sales were as high as 800000 tonnes. According to Forbes in 2005
Karsanbhai Patels net worth was $640 million.

SUCCESS STORY OF NIRMA

The Nirma success story of how an Indian Entrepreneur took on the

big MNCs and rewrote the rules of business:
It was in 1969 that Dr. Karsanbhai Patel started Nirma and went on to
create a whole new segment in the Indian domestic detergent market.
During that time the domestic detergent market only had the premium
segment and there were very few companies, mainly the MNCs, which
were into this business.
Karsanbhai Patel used to make detergent powder in the backyard of his house in Ahmedabad and then
carry out door to door selling of his hand made product. He gave a money back guarantee with every
pack that was sold. Karsanbhai Patel managed to offer his detergent powder for Rs. 3 per kg when
the cheapest detergent at that time was Rs.13 per kg and so he was able to successfully target the
middle and lower middle income segment.

Sabki Pasand Nirma

Nirma became a huge success and all this was a result of Karsanbhai Patels entrepreneurial skills.
Karsanbhai Patel had good knowledge of chemicals and he came up with Nirma detergent which was a
result of innovative combination of the important ingredients. Indigenous method was used, and also
the detergent was more environment friendly.
Consumers now had a quality detergent powder, having an affordable price tag.
The process of detergent production was labour intensive and this gave employment to a large
number of people. Nirma focused on cost reduction strategies to make a place for itself in the market.
Nirma has always been known for offering quality products at affordable prices and thus creating good
value for the consumers money.
In the 1980s Nirma moved ahead of Surf, a detergent by HLL, to capture a large market share. Later,
Nirma successfully entered in the premium segment of soaps and detergents. Nirma went on to become
the largest detergent and the second largest soap company in India.
Nirma had more than 35% market share in the detergent segment
and around 20 % market share in the toilet soap segment. The
company got listed on the stock exchanges in the year 1994.
Nirma adopted backward integration strategy for the regular
supply of raw materials, 90 % of which they manufacture
themselves.
Nirma
also
gave
due
importance
to modernization,expansion and up gradation of the production
facilities. The company also made sure that it uses the latest
technology and infrastructure.
As far as Corporate social responsibility (CSR) is concerned, Nirma has made some good efforts by
starting Nirma Education & Research Foundation (NERF) in the year 1994 for the purpose of running
various educational institutes. Nirma has also set up Nirma labs , which prepares aspiring entrepreneurs

to effectively face the different business challenges. Nirma also runs Nirma Memorial Trust ,Nirma
Foundation and Chanasma Ruppur Gram Vikas Trust as a part of their effort as a socially responsible
corporate citizen.
The company that was started in 1969 with just one man who used to deliver his product from one
house to the other, today employs around 14 thousand people and has a turnover of more than $ 500
million. In 2004 Nirmas annual sales were as high as 800000tonnes.According
to Forbes in 2005 Karsanbhai Patels net worth was $ 640 million