STRATEGIC MANAGEMENT

FMCG Sector
Dabur || P&G

Miral Parikh – 1802140 Rachit Khanna – 1802158 Rishabh Agrawal - 1802165

Kautilya Parmar – 1802141 Prarit Agarwal - 1802153
 OVERVIEW
MARKET SIZE IN 2018 MARKET CAP NO. OF
INDUSTRY CAGR COMPANY REVENUE (US$ BN) NET PROFIT (US$ BN)
(in US$ Billion) (US$ BN) BRANDS

5.4% NESTLE $93.5 $7.48 $267 2000

GLOBAL 10638.15
(2018-2025)
JOHNSON &
JOHNSON $76.4 $13 $344 90
20.6%
INDIAN 68.38
(2017-20) P&G $65.05 $10.19 $197 105

PEPSI CO $63.5 $10.5 $153 22

Future Key Trends
 Omnichannel eCommerce And Faster FinTech UNILEVER $127 310
$66 $7.9
Solutions: Stronger social media presence,
omnichannel brand presence, and personalization will Rank Methodology:
Parameters like revenues, net profits and market capitalization are taken and given weightages of 0.7, 0.2 and 0.1. The overall score is calculated and the final ranking is done.
level up the strategy of FMCG growth
 Health And Environment-Oriented Goods: Health-
conscious and environment-conscious goods will be
given priority over other types of products. Paperless
and plastic ban movements have clearly given hint
 Increase disposable income will lead to rise in rural
consumption to drive the FMCG market growth at
14.6% CAGR (2016-25)
 Data and predictive analysis will become a more
crucial element for FMCG because that helps figure out
what to sell, when, and where
Source: 1) IBEF, 2) Allied Market Research 3) mbaskool.com
 PORTER’S FORCE ANALYSIS
• Integrated business model and increasing capital requirement Barriers to
• Huge investments in setting up distribution networks and
promoting brands
Entry
• competition from established companies MODEST
• High brand loyalty for some products
• low switching cost and aggressive marketing strategies under
intense competition within the FMCG companies

Bargaining Industry Bargaining

Power of Competitiv Power of
Suppliers eness Customers
MODEST HIGH LOW

• Prices are generally governed by international commodity

markets, making most FMCG companies price takers
• Due to the long term relationships with suppliers etc., FMCG
companies negotiate better rates during times of high input cost
inflation
Threat of
Substitutes
HIGH
• Multiple brands positioned with narrow product differentiation
• Companies entering a category /trying to gain market share
compete on pricing which increases products substitution
• Competitiveness among the Indian FMCG players is high. With
more MNCs entering the country, the industry is highly
fragmented.
• Advertising spends continue to grow and marketing budgets as
well as strategies are becoming more aggressive.
• Private labels offered by retailers at a discount to mainframe
brands act as competition to undifferentiated and weak
brands.
 DABUR – COMPANY ANALYSIS  VISION:
”Dedicated to the health & well being of every household”
 MISSION:
VISION, ”To maximize the value offered to the shareholder”
MISSION  PRINCIPLES:
& VALUES  Consumer Focus
 Ownership
 Passion for Winning  Team Work
 Innovation
 People Development

Revenue for 2018-19: Rs. 8,533 Cr. (Growth:

10.1% YoY)

Net Profit for 2018-19: Rs. 1,446 Cr. (Growth:

6.5% YoY)

Strong R&D Base

Promoting Ayurveda by directly reaching 32000+ Doctors

 Outputs of the Value Chain:

Manufactured Capital - 71.5% Overall Social & Relat. Capital - 6.7 mn retail
Equipment Efficiency Level outlets where Dabur products are sold

Financial Capital - Rs. 1,442 Cr. PAT Natural Capital - 58% reduction in Ozone
depletion over last year

Human Capital - 1,21,461 Hrs. of Intellectual Capital - 18 Patents Filed till

Source: 1) Dabur Annual Report, 2) Dabur Investor Presentation Training date
 Procter & Gamble – COMPANY ANALYSIS
 VISION:
” Be, and be recognized as, the best consumer products & services Revenue for 2018-19: $66.83Bn
company in the world”

VISION &  MISSION:

” Branded products and services of superior quality and value.
Net Profit for 2018-19: $9.75Bn
MISSION
Improve the lives of the world's consumers, now and for generations to
• 300+ brands globally, 180+ countries
come. Leadership sales, profit and value creation” • Excellent distribution and availability
 VALUES: • Operations in over 130 countries
• Excellent marketing and advertising
Leadership, Ownership, Integrity, Passion for Winning, Trust

Value Chain Analysis Business Strategies

Financial Management
End-to-end integration of Supply chain
Research & Development
Facilities Management Digital technology for advanced planning

Human Resource Management Digitalization for product innovation

Efficient & Effective to Sustainable supply chain

Sourcing & Operations Outbound Customer
Procurement Logistics Service Supply Chain transformation to drive top and bottom lines
 COMPARITIVE ANALYSIS
Components Dabur India P&G
Revenue Rs.7680 Cr R.4.81 Lakh Cr
Market Cap $11 Bn $298.21 Bn
International Operations 8 countries 80 countries
Employees 7k+ 95k+

• Focus on Rural market • E-Commerce Strategy

• Tie up with Kirana stores
• Small package revolution
• Distribution focused
• Premium products (Badam HO)
• 3% sales in next 3 years
• Dabur – Amazon (Ayurveda
marketplace)
• P&G – Ecobox
STRATEGY FOR NEXT FIVE YEARS
Current Portfolio: Need to focus on more
Products – 381 profitable and penetrated
Geographies – 21 segments

Market Penetration
90
77 80
80
70 67
57 59
60
50 42
40 37
32
30 26
18 18 19
20
10 3 2 5 4
0

Rural Penetration Urban Penetration

 STRATEGY EXECUTION FOR NEXT FIVE YEARS
Comparison of BCG Matrix
Status P&G Dabur
Cash Cow Ariel, Vicks, Tide Chyawanprash,
Vatika Amla, • Develop Dual Competitive Advantage for these
Hajmola products
Star Gillette, Real Fruit Juice, • Invest in marketing to improve penetration in
Pantene, HnS, Activ Fruit Juice, new geographic markets and bolster Gen Y
Pampers, Dabur Red market
Whisper Toothpaste
Question Mark Olay Odomos,
Sanifresh,
• Can divest these brands to reduce expenditure
Oxylife Facial
• Utilise strong R&D capabilities of Dabur to create
Dog Dabur Gulabari, differentiation in terms of product offering
Burst Fruit Juice
References:

• http://www.forbesindia.com/article/my-learnings/dabur-vs-patanjali-veda-wars/51627/1
• https://www.livemint.com/companies/people/revival-in-demand-will-depend-on-budget-monsoon-dabur-s-mohit-
malhotra-1562003024867.html
• http://www.pginvestor.com/interactive/newlookandfeel/4004124/Strategy_Slides.pdf
• https://vivauniversity.files.wordpress.com/2011/09/pg-case-analysis.pdf
• https://www.pg.com/translations/pvp_pdf/english_PVP.pdf
• https://marketrealist.com/2015/07/procter-gamble-eyeing-opportunities-emerging-markets/
• http://panmore.com/procter-gamble-generic-strategy-intensive-growth-strategies
• https://economictimes.indiatimes.com/industry/cons-products/fmcg/pg-india-finds-a-winning-
formula/articleshow/68589317.cms
• https://www.livemint.com/Home-Page/t7hjfCmwLNxXn2NcU2fkrK/PampG-plans-to-add-half-a-billion-users.html
• https://www.news18.com/news/india/cheap-razor-made-after-pg-observes-men-shaving-in-rural-india-643413.html
THANK YOU!