SWOT ANALYSIS OF THE FMCG INDUSTRY

STRENGTHS

 Total turnover of more than US$13.1billion.Thus the industry has got a firm foot hold in the
Indian markets.
 High growth market potential due to high population growth rate, increase in disposable
incomes.
 Steadily decreasing excise duty, which made other FMCG products accessible for even the lower
income groups of the country.
 Strong entry barriers, therefore the threat of new market competition is very less profound.
 Existing capacity for the raw materials exceeds far from the demand. Thus there is no possible
threat of price increase; instead there can be price decrease due to competition.
 Some segments are growing in the industry .e.g detergent market, soap industry
Weaknesses
 Strong distribution and logistics required as the market is highly competitive.
 Constant innovation and upgradation have become buzzwords for the day.
 During recessionary period the marketers are faced with only one choice, value addition at the
same price or get out of the markets.
 Some segments have become highly saturated. There is no further scope of expansion, like toilet
soap
 ‘Me-too’ products which legally mimic the labels of established brands narrow down the scope
of FMCG products in rural & semi-urban market.
 Lower export level
Opportunities
 Consumerism is growing at rapid rate in country like India. Thus more and more people are
gaining knowledge of what’s good and what’s bad for them. They are now conscious of different
attributes and special futures of different products.
 Environment consciousness is increasing day by day. So there is still scope of introducing such
products that are environment friendly.
 Export potential
 Rising income level of consumer
 Untapped rural market

Threats

 Change in the price of raw materials that are imported or change in exim policy of government.
 Change in economic scenario, plunging the country in the deep recession.
 Removal of import restrictions resulting in replacing of domestic brands.
 Slowdown in rural demand.
 Tax & regulatory structure.