DABUR INDIA LTD.

- GLOBALIZATION

CASE ANALYSIS

ECONOMIC ANALYSIS FOR BUSINESS DECISIONS (EABD)

. In most emerging markets. move beyond national geographical boundaries to the global arena. Dabur India Ltd. the case is about an Indian enterprise attempting what few other consumer packaged goods (CPG) companies from emerging markets have attempted to do i. Having acquired a place among the top 10 CPG companies in India..e. The case examines whether global expansion. uncommon among its genre.CASE SYNOPSIS Set in June 2007. but with particular reference to the ongoing expansion in Nigeria. is logical for Dabur. It looks at the issues not only in the context of Dabur’s unique positioning in the domestic market. including India. Very few graduate to national status. (Dabur) has taken the next step forward. which itself is growing. CPG is a local business characterized by indigenous players aspiring to rule at provincial levels.

CASE ISSUES Should Dabur build scale first in India before investing in global operations? Does global expansion detract the company from its core market? What are the reasons why Duggal and his team are expanding globally? What are the domestic competencies that Dabur can leverage in a global market? Is the company’s template for globalization workable? Why is the template not working in Nigeria? How should Dabur address the Nigeria market? .

Building scale in the home market should be central to Dabur’s growth strategy because the Indian market is becoming competitive. Scale enhances the level of resources – financial. Retaining market share (and its ranking among the top 10 in India) would be difficult unless Dabur builds scale locally. Scale lowers the cost of entry into a new market. human and operational – with which Dabur could better manage the business uncertainties of global expansion. Yes Should Dabur build scale first in India before investing in global operations? 1. Scale provides a set of internal capabilities and skill sets that the company could deploy readily in overseas markets. .1. 3. 2. 4. Domestic scale reduces the risks involved in global operations.

but it is not a prerequisite. particularly when the competitors in both local and global markets are the same. Domestic scale offers a platform for the next leap forward for global expansion. In an increasingly global world. Dealing with competitors in markets outside India provides better insights to dealing with competitors within India. . Neighbouring markets are expanding. 2. No Should Dabur build scale first in India before investing in global operations? 1. There is nothing like countries as markets. 4. 3. There is an opportunity cost to letting go of growth possibilities outside India.1. the perception of a market cuts across geographical boundaries.

best spent on expanding locally. Even at the current levels of resource deployment. The company should therefore look at new growth options such as internationalization. driving alliances and acquiring assets. The markets are alien. No The Indian economy is on auto-pilot. relationships are new and integration is a challenging task. Dabur can be certain of maintaining its rate of growth in the domestic market. Expanding overseas is unlike expanding locally. and growth is assured in the domestic market over a long period of time. Yes Does global expansion detract the company from its core market? The company has articulated three routes to building global scale: expanding geographically. Driving the fit takes considerable managerial attention.2. .

Its products have universal appeal. What are the reasons why Duggal and his team are expanding globally? 1. . itself a motivation for company managers for whom internationalization also opens up new horizons of personal and professional development. The multinational competitors that Dabur is dealing with in its overseas markets are the same as those it is competing with in India. This is particularly true of the Indian Diaspora that the company has been targeting so far. The personal ambitions of senior managers who. The company has a core value proposition – herbal ingredients providing therapeutic effects – that can be replicated across diverse geographies. Investor apprehensions about Dabur’s geographical expansion are more about shortterm fluctuations in stock price than about the company’s intrinsic capabilities. 2. The customers that Dabur is dealing with in its overseas markets are similar to its customers in India. 5. expand and diversify.3. Dabur is an uncommon example of a CPG company from among emerging markets going global. requiring only minor adaptations to suit individual markets. 3. 4. need to prove that a professionally managed company (where members of the founding family have moved out of executive responsibilities) can grow. together.

. What are the domestic competencies that Dabur can leverage in the international markets? 1. 2. 6. develop localized products and create niches to drive long-term growth. Ability to identify consumer needs. 4. Independent supply chain for each business segment. Herbal ingredients in its products with therapeutic attributes.4. not products. 5. New product development: New products or variants contribute between five per cent and seven per cent of sales revenue every year at Dabur. Ayurveda as a growth platform. Sales force focused on channels: Sales organization structure in Dabur’s focus markets is oriented towards channels. 3.

There are several elements of the template that ensure success. it should be in the landscape between Nigeria and China. Spending resources only on Focus markets ensures that resources are not frittered away in unproductive avenues. For example: A new market for entry should be margin-accretive even in the short run. the company’s herbal platform will remain the basis for new customer acquisition and brand development. Yes Is the template for globalization workable? It provides the single largest defence for the CEO favour of global expansion. These elements eliminate the risks of global expansion. . and overall brand architecture will be limited to four core brands. Global expansion will proceed on track if the company sticks to it. The manner of market segmentation is another reason why Dabur is in good shape with global expansion.5.

soaps and mosquito repellents. Nigeria does not have Indian Diaspora. The country is.6. Soaps sold in Nigeria are cosmetic while Dabur’s soaps come with therapeutic attributes. a large market for categories like toothpastes. But there is lack of alignment in each of these categories. . however. Toothpaste is not a focus product for Dabur in any market. The products with which Dabur has penetrated other global markets do not sell in Nigeria. but it is unlike any of the focus markets that Dabur has been doing business with. Why is the template not working in Nigeria? Nigeria is a focus market. Mosquito repellents are consumed in the form of coils in Nigeria while Dabur’s offering is in the form of a cream.

Secondly. How should Dabur address the Nigerian market? One of the issues here would be whether changes are required in the standard template in Nigeria. The mismatch between product attributes and Nigerian needs is best addressed by tweaking exiting products through technology. Thirdly. what are the specific domestic competences that Dabur should deploy in Nigeria to grow the market? Developing localized products to suit customer needs is one of them. what are the opportunities for creating niches in the Nigerian market to drive long-term growth? .7.

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