Professional Documents
Culture Documents
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, Fiance, 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.
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 NonExecutive Director on the Board of Directors of the Company.
PRODUCTS
Saffola
Hot Oil
Nihar
Shanti Badam
Mediker
Caivil
'COME WIN' ---- their vision and mission is captured in this acronym, which
when bifurcated means the following: -
translate the consumer's needs and desires into marketable products and an everexpanding base of loyal consumers, with speed and a quality of response that surpasses the competition.
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.
SWOT ANALYSIS
Before going to the Marico Companys SWOT Analysis we must understand which things are included in the SWOT analysis;
Marketing Factors Indias 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 indentifying 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
Competitive Strengths & Weakness High cost capital, reserves & surplus Various Products, Domestic and Foreign market gainer
Operation personnel
P&M excellent parts & components available Quality management & personnel par with
competition
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
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
Legal
minimum wage laws environmental protection laws worker safety laws union laws Sunday closing laws municipal licenses laws that favour business investment
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 o
o o o o o
stability of labour supply wage expectations employee turn-over rate strikes and labour relations educational facilities
Material suppliers
o o o o
quality, quantity, price, and stability of material inputs delivery delays proximity of bulky or heavy material inputs level of competition among suppliers
Service providers
o o
Socio-cultural
population size and distribution age distribution education levels income levels ethnic origins
religious affiliations
Attitudes towards:
o o o o o o
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
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.
Degree of importance Environmental factors High (3) Economic Inflation rate Economic growth Consumer and investor confidence Legal Minimum wage laws Budget deficit or surplus Environmental protection laws Technology Cost and accessibility of electrical power Industrial productivity 3 3 +3 3 1 +3 -3 2 1 3 1 -3 Medium (2) low (1) High 3
+1 -
-1
+1
-2
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.
0 -
3 2
-1 -3 -
5 1
a. Plant location b. Production system c. Operation and control system d. R & D system
0 -
2 3 5
a. Personnel system b. Organisational and employee characteristics c. Industrial relations d. Quality and motivation of personnel
1 2
0 -
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.
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 its 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.
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 its 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 its 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 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.
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.
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
HIGH 1 3 5
AVERAGE 2 4 8
WEAK 6 7 9
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. 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.
Kaya:
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 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.
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.
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 companys so many competitors. So many products growth is so much as compare to there anther 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 crme is PARACHUTE NIGHT REPAIR CREME.
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 Expansion through cooperation
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 Fiance hair care brand in Egypt. The Ready Group's Fiance hair care brand has captured 20 per cent of the Egyptian market. Marico is leveraging the popularity of the Fiance brand to expand its business in Egypt and other parts of the Arab world.
Concept
A 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.
Activities
The 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.
Support activities
Administrative Infrastructure Management Human Resource Management Technology (R&D) Profit margin Inbound logistics Operation Outbound logistics marketing & sales Procurement Profit
Margin services
Primary activities
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 firms 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.
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.
This function is responsible for all purchasing of goods, services and materials. 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. 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.