NIRMA: Challenging established MNCs Introduction "It all started to earn a side income, and at that stage, I had

d never imagined this kind of success."- ---Karsanbhai Patel, CMD, Nirma Ltd. Nirma Operated as an SSI and reaped the benefits of subsidies and concessions and Started manufacturing with no power , no expensive machinery used a shed. Because of its production of low cost detergent, a market which no competitor at that time was trying to cater to, no big players happen to give any due thought to the growth of Nirma in the initial stage. As a result of which Nirma didnt had to face strict competition at the time of launch and could easily spread its wings. It was only when the size of the company and the product and the brand gained high recognition, competitors moved in with their aggressive strategies trying to push Nirma out of the market. But, by then nirma was already a 17 billion industry. Nirma promoted itself using all strategies which a common people could connect to like "Mouth of word Advertising and Using AI-Radio -reach target segment , cover large area Availability in local grocery stores, villages Using jingle which common people could understand and link with. Advertisement showing normal housewives who use the product rather than using models and actress

PRODUCT RANGE OVER A PERIOD OF TIME Nirma Detergent Powder Super Nirma Powders Nirma Popular Powder Detergents Nima Green Powder Nirma Detergent Cake Cakes Super Nirma Detergent Cake Nima Green Cake Toilet Soaps Carbolic Soaps Nirma Bath Soap

Nirma Beauty Soap Nima Rose Nima Lime Beauty Soaps Nirma Herbalina Nima Herbal Nirma Beauty Soap Nirma Lime Fresh Nirma Premium Soap Premium Soaps Nirma Sandals Packaged Foods Scouring Products

Iodized Salt

Nirma Shudh

Nirma Clean Dish Wash bar Nirma Bartan Toothpaste Nirma Toothpaste Nirma Shampoo Shampoo Nirma Shikakai

Personal Healthcare

EXTERNAL ANALYSIS USING PEST MODEL In the industry which was highly dominated by a bigger group like HLL, Nirma happened to carve its own niche because of various factors which suited its growth . POLITICAL-

1) Received Government support as it operated as an SSI and was thus able to reap the benefits of subsidies and concessions. 2) Received Excise and tax benefit as for 9 years , manufacturing and operations were carried from home.

3) Got government support as it was carrying out work

SOCIAL-

Using name of daughter Nirupama Belief that product is good, family name at sake "Mouth of word Advertising Availability in local grocery stores, villages Using jingle which common people could understand and link with. Advertisement showing normal housewives who use the product rather than using models and actress 6) Showing focus on Value for money 1) 2) 3) 4) 5)
ECONOMICAL-

1) Obtains cash discounts in purchasing raw materials 2) Operated as an SSI and was thus able to reap the benefits of subsidies and concessions 3) Worked on daily price basis with truck suppliers, so as to get cost advantage when market price is low
TECHNOLOGICAL

1) Had the formula for the low cost detergent 2) Using AI-Radio to reach target segment which use to cover large area 3) Simple, flexible and effective flat distribution system

INTERNAL ANALYSIS USING SWOT MODEL Nirma had lot of advantages which helped it to grow and still be a important player in the detergent and soap market , but the response from competitors especially HLL happen to affect the growth and share size of NIRMA. STRENGTHS Strong Brand Equity Name Nirma was considered to be providing value for money Wide Distribution Network - Flat distribution network with access to 675000 retail outlets. Market Leadership Was a Pioneer in low and middle income segment group and Rural India Backward Integration - Opened Sulfuric Acid Facilities, Glycerin plants etc to get easy raw material and at better price and desirable quality.

WEAKNESS Less presence in Medium Segment - HLL and Henko already occupied the medium segment and launched products at affordable price for those segment.

Lack of Global Tie-ups HLL being a major player had lot of tie ups and mergers, so could easily connect to global market. High Interest Burden Nirma had high interest and debt ratio, as it was trying to expand.

OPPORTUNITY Exports With limited resources, it tried to sell overseas like Bangladesh, Srilanka etc Product Diversification Using the similar distribution network and other raw materials , it entered in personal healthcare segment and salts etc. Acquisitions It acquired other small scale local manufacturers and raw material manufacturing plants, so as to gain advantage over cost cutting.

THREATS MNCs in toilet & soap industry Presence of big players like HLL, Launch of Wheel for same segment. Operation STING to depromote the quality of NIRMA Emergence of small Regional Players Lot of small players tried to follow NIRMA model like HIPPOLIN, OK and tried to cut down the market share of NIRMA.

STRATEGIC SUGGESTIONS Considering the situation of NIRMA and after analyzing its growth and the competition and aftereffects of it on the market share, I would like to come up with following suggestion for the management of NIRMA

1) It should try to create a positive image about itself as philanthropic, educational institute ( Operation STING hampered the image) 2) It should higher good talent and provide growth opportunities to people, 3) It should try to shift its low segment base towards higher end segment , but not forgetting that its major and prime segment is RURAL India and lower income group of INDIA.\ 4) It should try to diversify across, but should come up with different brands for different segment rather than using the same brand name across products meant for different target segment.