Nirma Challenging Established MNCs

Chemist Govt. Dept. of Mining & geology

Nirma (1960s)

Karshanbhai Patel

Discover Low Cost Detergent

Side Income

Discovered a GOLD mine

Nirma always plays Price war. With its low cost Strategy.

NIRMA 3.50 rs.

SURF 15 rs.

Nirmas Growth Story

1969
1972 1980 1984 1988

Commercially Production started

Become Company

Product Rise to its glory

Sell more then Surf

1.72 lack tonne Sell 60% market Share

Nirmas Growth Strategy in the 1980s

Provide the Common man with a QUALITY product at an AFFORTABLE price. Nirmas positioning: o Economical o Bulk users o Everyday Washing o For Middle Calss Nirma Benefited at
Govt.'s Small Sector Growth Policies

NoRestriction on Capacity

Nirma Benefited at

Investment Subsidy

Tax Concession

Nirmas Low Cost Structure

Low Overheads

Distribution Management

Indigenous Machinery

Nirma's Low Cost Structure

Logistic Management A lernt & Frugal Management

Cost Control

How FMCG market works and Nirma Fits in it.

Repet Purchase Well Conceived Efficient & Resourceful Dist. Network

FMCG market & Nirma

Speed in Movement Volume game Retail Chain

Result of Nirmas Success: o HLL launched low cost Wheel in 1987. Wheel Blue Wheel Green Emergence of copycats: o Look-alikes o Growth of several mfg. & ancillary units. Like Hippolin, OK, etc. o Adopt low cost structure o Gujarat become detergent capital 60% production in Gujarat. Nirma have a Five listed Companies: o NDL (Nirma Detergent Ltd.) o NSDL (Nirme Soaps and Detergent Ltd.) o SSDL (Shiva Shops and Detergent Ltd.) o NCL (Nilima Chemicals Ltd.) o Nirma Limited. Internal Structure: o Nirma is an entrepreneurial firm so all major operations are handled by Mr. Patel. o There is very simple structure, 10,000 employees > 250 managers > Mr. Patel

Nirmas Product Categories:

Toilet Shops
Nirma Bath Nirma Beauty Nirma Premium

Shampoo

Nirmas Product Categories

Detergent
Nirma Nirma Super

Toothpast

Nirmas diversification: o Rs. 1040 crore Soda Ash Plant o Rs. 400 crore Linear Alkyl Benzene mfg. Facility These two chemicals account for three-forth cost of manufactured detergent. Nirmas Overseas Operation: o Bangladesh o China o Russia o Sri Lanka Some Emergent Issues for Nirma: o Image Problem: Value for money, Cheaper o Competitive advertising from MNCs o Rising income levels of Middle class o Rising cost o Increase in cost of main raw materials.