A PROJECT REPORT ON

STRATEGY ANALYSIS OF FMCG

AND FMCD (ELECTRONIC) INDUSTRY

SUBMITTED TO:
DR. SUPRITI MISHRA

SUBMITTED BY:

AYUSHI RASTOGI (19PGDM-BHU017)

CHAYAN SEN (19PGDM-BHU020)
DIKSHA PRASAD (19PGDM-BHU024)
GAURAB BISWAS (19PGDM-BHU025)
HARSHIL SHAW (19PGDM-BHU028)
ROHAN KUMAR JAIN (19PGDM-BHU054)
SOUMAJIT KARMAKAR (19PGDM-BHU070)
SWAYAMBHUBA SUBUDHI (19PGDM-BHU084)
EXECUTIVE SUMMARY

This report is about the study of 2 different industries: FMCD(Electronic) and FMCG. We will
study the present state of industries by using PESTEL and then we used SWOT analysis to get
strengths, weakness, opportunities’ and threats analysis and Porter’s 5 forces technique to
evaluate all internal and the external factors that affect the industry for 4 of the companies
for each industry.

LITERATURE REVIEW

PESTEL ANALYSIS:

A PESTEL analysis is a framework or tool used by marketers to analyses and monitor the
macro-environmental (external marketing environment) factors that have an impact on an
organization. The result of which is used to identify threats and weaknesses which is used in
a SWOT analysis.

• PESTEL stands for:

P – Political

E – Economic

S– Social

T – Technological

E – Environmental

L – Legal
Political Factors: These are all about how and to what degree a government intervenes in the
economy. This can include – government policy, political stability or instability in overseas
markets, foreign trade policy, tax policy, labor law, environmental law, trade restrictions and
so on.

Economic Factors: Economic factors have a significant impact on how an organization does
business and how profitable they are. Factors include – economic growth, interest rates,
exchange rates, inflation, disposable income of consumers and businesses and so on.

Social Factors: Also known as socio-cultural factors, are the areas that involve the shared
belief and attitudes of the population. These factors include – population growth, age
distribution, health consciousness, career attitudes and so on. These factors are of interest as
they have a direct effect on how marketers understand customers and what drives them.

Technological Factors: We all know how fast the technological landscape changes and how
this impacts the way we market our products. Technological factors affect marketing and the
management thereof in three distinct ways:

• New ways of producing goods and services

• New ways of distributing goods and services
• New ways of communicating with target markets

Environmental Factors: These factors have only really come to the forefront in the last fifteen
years or so. They have become important due to the increasing scarcity of raw materials,
pollution targets, doing business as an ethical and sustainable company, carbon footprint
targets set by governments. These are just some of the issue’s marketers are facing within
this factor. More and more consumers are demanding that the products they buy are sourced
ethically, and if possible, from a sustainable source.

Legal Factors: Legal factors include - health and safety, equal opportunities, advertising
standards, consumer rights and laws, product labelling and product safety. Companies need
to know what is and what is not legal to trade successfully. If an organization trades globally
this becomes a very tricky area to get right as each country has its own set of rules and
regulations.

PORTER 5 FORCES:

Porter’s five forces model is an analysis tool that uses five industry forces to determine the
intensity of competition in an industry and its profitability.
Rivalry among existing competitors: This force is the major determinant on how competitive
and profitable an industry is. In competitive industry, firms have to compete aggressively for
a market share, which results in low profits.

Threat of new entrants: This force determines how easy (or not) it is to enter a particular
industry. If an industry is profitable and there are few barriers to enter, rivalry soon
intensifies. When more organizations compete for the same market share, profits start to fall.
It is essential for existing organizations to create high barriers to enter to deter new entrants.

Bargaining power of supplier: Strong bargaining power allows suppliers to sell higher priced
or low-quality raw materials to their buyers. This directly affects the buying firms’ profits
because it has to pay more for materials.

Bargaining power of buyers: Buyers have the power to demand lower price or higher product
quality from industry producers when their bargaining power is strong. Lower price means
lower revenues for the producer, while higher quality products usually raise production costs.

Threat of substitutes: This force is especially threatening when buyers can easily find
substitute products with attractive prices or better quality and when buyers can switch from
one product or service to another with little cost.
SWOT Analysis:

SWOT analysis is a framework used to evaluate a company's competitive position and to

develop strategic planning. SWOT stands for strengths, weaknesses, opportunities and
threats. SWOT analysis assesses internal and external factors, as well as current and future
potential.

SWOT stands for

• S - Strengths
• W – weakness
• O – opportunity
• T – threats

Strengths: describe what an organization excels at and what separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique technology
and so on. For example, a hedge fund may have developed a proprietary trading strategy that
returns market-beating results. It must then decide how to use those results to attract new
investors.

Weaknesses: stop an organization from performing at its optimum level. They are areas
where the business needs to improve to remain competitive: a weak brand, higher-than-
average turnover, high levels of debt, an inadequate supply chain or lack of capital.

Opportunities: refer to favorable external factors that could give an organization a

competitive advantage. For example, if a country cuts tariffs, a car manufacturer can export
its cars into a new market, increasing sales and market share.

Threats: refer to factors that have the potential to harm an organization. For example, a
drought is a threat to a wheat-producing company, as it may destroy or reduce the crop yield.
Other common threats include things like rising costs for materials, increasing competition,
tight labor supply and so on.
 INTRODUCTION

Indian consumer durables market is broadly segregated into urban and rural markets, and is
attracting marketers from across the world. The sector comprises of a huge middle class,
relatively large affluent class and a small economically disadvantaged class. Global
corporations view India as one of the key markets from where future growth is likely to
emerge. The growth in India’s consumer market would be primarily driven by a favorable
population composition and increasing disposable incomes.
Per capita GDP of India is expected to reach US$ 3,273.85 in 2023 from US$ 1,983 in 2012.
The maximum consumer spending is likely to occur in food, housing, consumer durables,
and transport and communication sectors.

Market Size

• The growing purchasing power and rising influence of the social media have enabled
Indian consumers to splurge on good things. Import of electronic goods reached US$
53 billion in FY18.
• Indian appliance and consumer electronics (ACE) market reached Rs 2.05 trillion
(US$ 31.48 billion) in 2017. India is one of the largest growing electronics market in
the world. Indian electronics market is expected to grow at 41 per cent CAGR
between 2017-20 to reach US$ 400 billion.
• Television industry in India is estimated to have reached Rs 740 billion (US$ 10.59
billion) in CY2018 and projected to reach Rs 955 billion (US$ 13.66 billion) in CY2021.
• As of FY18, washing machine, refrigerator and air conditioner market in India were
estimated around Rs 7,000 crore (US$ 1.09 billion), Rs 19,500 crore (US$ 3.03 billion)
and Rs 20,000 crore (US$ 3.1 billion), respectively.
• India’s smartphone market grew by 14.5 per cent year-on-year with a shipment of
142.3 million units in 2018. India is expected to have 829 million smartphone users
by 2022. In 2019, India is expected to manufacture around 302 million handsets.

PESTEL OF ELECTRONIC DURABLES

PESTEL examination gives incredible insight concerning working difficulties Electronics for
Imaging, Inc. will look in predominant full-scale condition other than serious powers. For
instance, an Industry might be exceptionally gainful with a solid development direction yet it
won't be any useful for Electronics for Imaging, Inc. on the off chance that it is arranged in
temperamental world of politics.
POLITICAL

Political elements assume a critical job in deciding the variables that can affect Electronics
gainfulness for long haul in a specific nation or market. The achievement accomplished in
such a powerful industry across different nations is to enhance the precise dangers of world
of politics. The accompanying components are for political: -

• Political soundness.

• Level of debasement - particularly levels of guideline in Technology area.

• Legal system for contract requirement

• Trade guidelines and duties identified with Technology

• Favored exchanging accomplices

• Pricing guidelines – Are there any valuing administrative system for Technology

• Taxation - charge rates and motivating forces

• Wage enactment - the lowest pay permitted by law and extra time

• Mandatory representative advantages

ECONOMIC
The Macro condition factors, for example, – expansion rate, reserve funds rate, loan fee,
outside swapping scale and financial cycle decide the total interest and total interest in an
economy. While miniaturized scale condition factors, for example, rivalry standards sway
the upper hand of the firm. Nation's monetary factor, for example, development rate, and
so on assists with gauging the development direction of part name as well as that of the
association. Financial variables that ought to be consider while leading PESTEL examination
are -
• Type of financial framework in nations of activity – what sort of monetary framework
there is and how stable it is.

• Government intercession in the free market and related Technology

• Exchange rates and strength of host nation cash.…

SOCIAL
Society's way of life and method for doing things sway the way of life of an association in a
domain. Common convictions and mentalities of the populace assume an extraordinary job
in how advertisers will comprehend the clients of a given market Social factors that ought to
be considered are -
• Demographics and ability level of the populace

• Class structure, progressive system and force structure in the general public.

• Education level just as training standard

• Culture, for example, sexual orientation jobs, social shows and so on.

• Entrepreneurial soul and more extensive nature of the general public. A few social
orders empower enterprise while some don't.

• Attitudes like wellbeing, natural awareness, and so on.

• Leisure interests

TECHNOLOGY
Innovation is quick disturbing different businesses in all cases. A firm ought to not
exclusively do innovative investigation of the business yet in addition the speed at which
innovation upsets that industry. Slow speed will give additional time while quick speed of
innovative interruption may give a firm brief period to adapt and be gainful. Innovation
investigation includes understanding the accompanying effects -
• Recent innovative improvements

• Technology's effect on item offering

• Impact on cost structure

• Impact on esteem chain structure in Technology division

• Rate of innovative dissemination

ENVIRONMENTAL
Various markets have various standards or natural norms which can affect the gainfulness of
an association in those business sectors. Indeed, even inside a nation regularly states can
have distinctive ecological laws and obligation laws. Before entering new markets or
beginning another business in existing business sector the firm ought to painstakingly assess
the natural models that are required to work in those business sectors. A portion of the
natural factors that a firm ought to consider theretofore are -
• Weather

• Climate change

• Laws directing condition contamination

• Air and water contamination guidelines

• Recycling

• Waste the board in Technology division

• Attitudes toward "green" or environmental items

• Endangered species

• Attitudes toward and support for sustainable power source

LEGAL
In number of nations, the legitimate structure and establishments are not strong enough to
secure the licensed innovation privileges of an association. A firm ought to deliberately
assess before entering such markets as it can prompt robbery of association's mystery. A
portion of the legitimate components that authority ought to consider while entering
another market are -

• Discrimination law

• Copyright, licenses/Intellectual property law

• Consumer security and web-based business

• Employment law

• Health and wellbeing law

• Data Protection
Hitachi, Ltd. Japanese multinational conglomerate company headquartered in Chiyoda,
Tokyo, Japan. It is the parent company of the Hitachi Group and formed part of
the Nissan zaibatsu and later DKB Group of companies before DKB merged into the Mizuho
Financial Group. Hitachi operates eleven business segments, ranging from Information &
Telecommunication Systems to Construction Machinery

SWOT Analysis:

STRENGTHS:

- Reliable suppliers:
Hitachi has got a strong base of supplier base of raw materials which don’t let
HITACHI face any supply chain bottlenecks.
- Strong distribution network:
Over all these years, HITACHI has built a strong distribution network which helps
HITACHI to reach all of its potential customers.
- High level of customer satisfaction:
The company has got its superb customer relationship management department
which helps the company to achieve high customer satisfaction.

WEAKNESS:

- Hitachi isn’t highly successful at integrating with different work culture.

- The company has not been able to tackle the challenges present by the new entrants
in the segment and has lost small market share in the niche categories.
OPPORTUNITIES:

- Lower inflation rate – The low inflation rate brings more stability in the market,
enable credit at lower interest rate to the customers of Hitachi
- New customers from online channel – Over the past few years the company has
invested vast sum of money into the online platform.
THREATS:

- No regular supply of innovative products – Over the years the company has
developed numerous products but those are often response to the development by
other players.
- Rising pay level especially movements such as $15 an hour and increasing prices in
the China can lead to serious pressure on profitability of Hitachi

Porter’s 5 Force:

Bargaining power of Buyers: In this force buyers play a very major factor. The more
bargaining power they have, the more impact they will have on price. However, the
bargaining power depends on multiple factors, like if the switching cost for the consumer
will be high, there will be low bargaining power. Overall consumers of Hitachi have
moderate bargaining power. The company takes care of its consumer by meeting their
changing demands.

Bargaining power of Suppliers: As the bargaining power of suppliers affect the profitability
of company. The high price charge by the suppliers means more cost of production for the
company & low profit margin. For Hitachi bargaining power of suppliers is low. The
suppliers will have less impact in the automotive industry, as numerous suppliers are
present.

Threats of New Entrants: Threats from the new entrants is low for Hitachi, cause high
capitalization cost is required to operate in the automotive or electronic industry. New
entrants have to compete with the big competitor like Hitachi, who already has huge
customer base & big brand name. Developing & managing the huge distribution network is
difficult for any new firm.

Threats of the Substitute Products: Hitachi group is facing a huge threat from substitute
products, because Hitachi has diversified its business line in different segments to mitigate
the risks. So, it has to compete with rivals & make sure to produce best innovative product
to hold their customers. Hitachi has to maintain its services & system to retain the
consumers.
Rivalry of Existing Players: As the Hitachi group is diversified in different business line so it is
facing a huge competition in every industry. Hitachi has a pressure to maintain the market
position in every industry, by focusing the activities of the rivals. It needs to bring more
innovative & differentiative products in every business to achieve its goal
LG Electronics Inc. is one of the world’s biggest company in electronic industry. It is a well-
known brand carry its reputation over the 61 years. Founded in South Korea having its head
quarter in Yeouido- dong, seoul, South Korea. It has a huge product variety, manufacture
products such as Refrigerators, TV, Projectors, Mobile etc. LG Electronics controls 114 local
subsidiaries worldwide, with roughly 82,000 executives and employees. LG is an MNC and is
a well-recognized brand which deals in white & brown goods. It has always been known for
its simple design, easy to use, Innovative & reliable technology.

SWOT analysis

STRENGTH –

o LG invest a huge amount to provide best service to its customer. It not only provide
before sales service but also provide after sales service.
o Its has a huge product variety which make him stand in the market in all sections.
o LG is most trusted brand by the dealer that the reason why distributor do not wont to
leave this company product and move toward collaboration with other company.
WEAKNESS –

o Due to huge variety of the product it faces difficulty in managing all the product as
well as they also face difficulty in innovating that product to compete in market.
o The profitability ratio and Net Contribution % of LG Group are below the industry
average.
o The company is not good at managing the market share as well as financial planning.
By seeing the report we can say that the company can use its assets, cash in a better
way than using in present.

OPPORTUNITIES –

o Rural people of across the world are changing their lifestyle and trying to adopt the
urban lifestyle. This is a huge opportunity for the company to attract them by their
product.
 o Opening up of new markets because of government agreement – the adoption of new
technology standard and government free trade agreement has provided LG Group an
opportunity to enter a new emerging market.
THREATS –

o The competitors in this segment may case a price war for the company. Which may
create problem in their sales and growth.
o The demand of the customer for the newly innovated product never settles down and
for this they have to focus on the requirement of the customer.
o New technologies developed by the competitor or market disruptor could be a serious
threat to the industry in medium to long term future.

Porter’s 5 Force:

Threat of new entrance (MEDIUM) –

o As the technology in this industry keep on upgrading which make the new entrance
easy they only have to focus on future keeping past used product aside.
o The competition of LG is already high which keep new competitors in fear.
o This industry mostly relays on the old brand according to the image of the company
which means it’s a treat for competitors.
o The government policies within the industry require strict licensing and legal
requirements to be fulfilled before a company can start selling. This makes it difficult
for new entrants to join the industry, therefore, making the threat of new entrants a
weak force.
Bargaining power of Suppliers (LOW) –

o The distributor or supplier has a low bargain power as the number of buyer are less
and the number of distributor for this electronic industry is more.
o Being a high brand value the distributor is ready to sell LG product and always try to
keep good relationship with company, represent the less bargaining power.
o The suppliers do not provide a credible threat for forward integration into the industry
in which LG Group operates. This makes the bargaining power of suppliers a weaker
force within the industry.
Bargaining power of Customer (HIGH) –

o The buyers of this industry are less and once they purchase the product they don’t
upgrade until new technology arrive or the product get damage. This makes the buyer
bargaining power high.
 o The buyer has more option and easily availability to switch to other company.
o The buyers are price sensitive they want good long lasting product at their price which
create a pressure on the company.
Threats to Substitute (LOW) –

o There are many products in LG electronics which has no substitute for eg. Washing
machine, AC.
o They don’t have much substitute the focus on this segment can be low.
Rivalry among firms (HIGH) –

o The LG is having huge Rivals in the market for a particular product. Not only the
reputed companies but also the local market or makers.
o The LG always face a price war with its Rival for many of its product. As every brand
in this segment is fighting for its survival, trying to bring new innovation, using new
technology to compete with other
One of the largest companies in the electronic industry. Founded in 1891 by Gerard Philips
and Anton Philips. Having its head quarter in Amsterdam, Netherlands. The first product of
the company was light bulbs. The company is currently having a huge employee base of
75000 people across the word and spread over 100 countries. This company serve the world
with its huge product variety such as Mixer, Earphones, TV, Iron, Trimmer etc.

SWOT analysis –

STRENGTH –

Research and Development – one of the biggest strength of this company is innovation
which cannot be come without Research. Philips invest a huge amount of its revenue on
R&D to keep itself innovated and link with the modern world. In today’s time Philips has
over 50+ research center across Asia.

o Distribution and Reach – As being one of the oldest electronic company Philips is
having a huge distribution base all over the world it and it keep on upgrading these
bases so that it may reach as many customers it can. Also the distribution base of
Philips is beyond the mark as these distributors not only help to promote Philips
product but also assist the company employee to provide easily reach to its
customer.
o Market Base – Philips having a market position all over the world. It always stands on
the customer trust and got a huge loyal customer base. It also has a good brand
equity. Philips also invest in many high – growth and profitable business across the
world to achieve its market position.
WEAKNESS –

o While in this journey of success Philips also got weakness of involving in legal
tragedies. It has more than 50 cases which bring the investigation over the company.
o In the competitive market the companies spend huge revenue on its R&D after
spending a huge amount on R&D Philips cannot catch the market level of innovation.
In today’s time customer seek towards the company which bring more technology
with low cost and variety.
 o Philips feedback mechanism is not up to the mark, which bring difficulty in knowing
the market scenario.
OPPORTUNITIES –

o In the current time people like to shop from their place despite going to the market
or store. Online platform is one of the biggest opportunity for a company to grow in
a faster way. Company should use online platform and may also set up its online
store to sell its product and capture different segment.
o India and china are the two countries with major population. Controlling the
industry segment of these two market with their need may help company to grow
faster.
o Company may become a part of various government scheme to get in reach with of
the people and may be in huge visibility.
THREATS –

o Low cost product in the local market, with same specification.

o Arrival of new companies are easy in this industry.
o Environment and other government policies changes may cause effect.
o The fake arrival of the product with the same tag may confuse the customer and may
cause negative image for company.

Porter’s 5 Force:

Threat of new entrance (LOW) –

o Industry in which Philips operate the threat is low because the capital investment in
this industry is high.
o Philips already have a huge competition in this industry. The company in this
industry are already known brand with a good customer support. Entrance of new
competitor is difficult.
o Getting government license in this industry is bit difficult which also reduces the
competition.

Bargaining power of suppliers (LOW) –

o The number of supplier in this industry are high as compared to the number of
buyers. Philips can easily get a new supplier to distribute it product in market. Which
means the power of supplier is low.
o In this industry the supplier donot contend with other product because of less
substitute in industry. They have to sell the product which is provided by the
company.
 Bargaining power of buyer (HIGH) –
o As we know the number of supplier in this industry is high so that the bargaining
power of the buyer is high.
o The buyer may switch to the other company product due to its price or the quality of
the product.
o In this industry the buyer is more focus toward the quality and specification over the
price. Which allow then frequent purchase. This make power of buyer weak.

Threat from substitute (LOW) –

o There are very few substitutes available for the products that are produced in the
industry in which Philips operates. The very few substitutes that are available are
also produced by low profit earning industries. This means that there is no ceiling on
the maximum profit that firms can earn in the industry in which Philips operates. All
of these factors make the threat of substitute products a weaker force within the
industry
o The very few substitutes available are of high quality but are way more expensive.
Comparatively, firms producing within the industry in which Philips operates sell at a
lower price than substitutes, with adequate quality. This means that buyers are less
likely to switch to substitute products. This means that the threat of substitute
products is weak within the industry.

Rivalry among existing firms (HIGH) –

o The strategies of the firms within the industry are diverse, which means they are
unique to each other in terms of strategy. This results in them running head-on into
each other regarding strategy. This makes the rivalry among existing firms a strong
force within the industry.
The production of products within the industry requires an increase in capacity by
large increments.
Panasonic one of the best electronic application country founded in 1918, in Osaka Japan by
Kōnosuke Matsushita having its headquarter in Osaka Japan. It has a huge variety of product
such as TV, Touchpad, mobile, Washing machine, AC and many more. Having a huge
employee base spread across the world.

SWOT Analysis

STRENGTH –

o Solid market position and brand: Panasonic may not be Apple or Microsoft, but they
still have a very fair share of the consumer electronics market. Panasonic is well
known for their various cameras, and have a reputation for their fantastic Japanese
innovation and quality.
o High quality products: Panasonic’s goal isn’t to shift millions of cheap, low-quality
products. Instead, Panasonic produces long-lasting electronics of high standards —
certainly a big strength.
o High quality products: Panasonic’s goal isn’t to shift millions of cheap, low-quality
products. Instead, Panasonic produces long-lasting electronics of high standards —
certainly a big strength.
WEAKNESS –

o Expensive products: Price and quality go hand-in-hand in a lot of companies, and

Panasonic is no exception. Unfortunately, Panasonic’s high prices are easy to
compete with (discussed further within ‘Threats’).
o Inefficient management: Despite the fact that Panasonic was founded by Konosuke
Matsushita, supposedly the ‘god of management’, this corporation is said to have
internal management problems. This could be as a result of their perhaps overly-
diverse product line.
OPPORTUNITIES –

o Emerging markets: In addition to providing almost ‘luxury’ consumer electronics,

Panasonic also produces household appliances which have a much more global
demand. As a result, there is demand for Panasonic products even in poorer regions.
In general, this multinational has plenty of opportunity to expand into markets in
Latin America, India and perhaps one day Africa.
 o New products: Like most tech companies, if Panasonic can catch the next ‘big thing’
in electronics, there is a lot to be gained. Panasonic’s healthy wealth, large working
force (over 250,000 workers) and innovation might help them to act on their next big
opportunities.
THREATS –

o The changes in the technology is one of the major threat in current time.
o Sony, LG, Samsung, Philips and Toshiba all compete directly with many of the
products that Panasonic produces. Each of them has their own strengths — lower
prices, better quality, and even better customer support. If Panasonic can’t keep up
with innovation, they will be pushed aside by other huge multinational tech
companies.

Porter’s 5 Force:

Threat from substitutes (NORMAL) –

o The threat from substitute products is moderate. It is because there are a very large
number of consumer electronics brands selling similar products.
o To moderate the threat, Panasonic has diversified into new areas. However,
consumer electronics sale is the biggest source of revenue for the brand and due to
the large number of CE brands in the market substitute products are also available in
plenty.
o The only factors moderating this threat are brand image, quality and level of
innovation and diversification. The overall threat from substitute products remains
moderate.
Threat from new entrants (LOW) –

o While smaller brands can enter the CE market with fewer products, to challenge the
position of well-established brands like Panasonic is difficult. To compete with the
bigger brands like Panasonic any new brand would need to make significant
investments into product quality, large firm infrastructure, marketing, R&D as well as
skilled human resource professionals.
o There are other legal and economic barriers too making entry into the CE market
difficult. Creating a brand image that can compete with the existing brands is also
difficult. All these factors minimize the threat from any new entrant. The overall
threat remains very low.
Bargaining power of buyers (HIGH) –

o The bargaining power of the customers has grown in the 21st century. It is
because while the 21st century customer is well informed, he makes his buying
decisions after conscious evaluation. Increasing competition has also added to
the bargaining power of the customers who want better quality products at
affordable prices.
o The quality and innovative technology of Panasonic are a source of competitive
advantage but rival brands also offer matching quality. Since there are more
brands fighting for customer share, it gives the customers extra bargaining
power. Moreover, Panasonic is less aggressive in terms of marketing. The overall,
bargaining power of the customers remains high.
Bargaining power of suppliers (LOW) –

o The suppliers of Panasonic are located all over the world. Globally, it has established
trustful relationships with its suppliers to form partnerships that are based on
customer values and social responsibility.
o The bargaining power of the suppliers remains low because of their small size and
low financial clout. These suppliers are required to follow the rules set by Panasonic
and comply with laws and regulations as well supply raw material in a socially
responsible and sustainable manner.
o Panasonic sets the rules related to CSR and information sharing which the suppliers
are required to follow. The brand can easily shift to new suppliers in case an existing
one does not make the mark in terms of quality or the rules of supply chain. In this
way, while Panasonic gets the upper hand, the suppliers hold very low bargaining
power.
Intensity of competitive Rivalry (HIGH) –

o Competitive rivalry among the existing brands is intense. A large number of brands
from Samsung to LG and SONY are competing for market share in the consumer
electronics market. Most of these brands are highly aggressive about marketing their
products and brand.
o Panasonic is not so aggressive about marketing but invests heavily in Research and
Development. It competes on basis of quality and innovative technology.
o Apart from that, the brand image of Panasonic is also a source of competitive
advantage for the brand. However, most of its major competitors are strong brands
with global market presence and great brand image. All these factors add to the
intensity of competition. The overall competitive rivalry among the competing brand
remains high.
 INTRODUCTION

Fast-moving consumer goods (FMCG) sector is the 4th largest sector in the Indian economy
with Household and Personal Care accounting for 50 per cent of FMCG sales in India.
Growing awareness, easier access and changing lifestyles have been the key growth drivers
for the sector. The urban segment (accounts for a revenue share of around 55 per cent) is
the largest contributor to the overall revenue generated by the FMCG sector in India
However, in the last few years, the FMCG market has grown at a faster pace in rural India
compared with urban India. Semi-urban and rural segments are growing at a rapid pace and
FMCG products account for 50 per cent of total rural spending

Market Size

The retail market in India is estimated to reach US$ 1.1 trillion by 2020 from US$ 840 billion
in 2017, with modern trade expected to grow at 20 per cent - 25 per cent per annum, which
is likely to boost revenues of FMCG companies. Revenues of FMCG sector reached Rs 3.4
lakh crore (US$ 52.75 billion) in FY18 and are estimated to reach US$ 103.7 billion in 2020.
The sector witnessed growth of 16.5 per cent in value terms between July-September 2018;
supported by moderate inflation, increase in private consumption and rural income.@
The FMCG sector is expected to grow at 9-10 per cent in 2019.Rise in rural consumption to
drive the FMCG market. It contributes around 36 per cent to the overall FMCG spending.
FMCG urban segment witnessed growth rate of 8 per cent whereas rural segment grew at 5
per cent in quarter ended in September 2019.
PESTEL OF FMCG

In India FMCG is considered to be the fast-growing segment which is expected to grow from
$37 billion to $49 billion, from the year 2013 to 2014 respectively. There was a decline in
the FMCG sector now it is growing. The introduction of the sachet packs has increased
penetration of the products in the market as lower income have started using the product.
Now people are having more disposable income so therefore they are willing to upgrade
and improve their lifestyle.

POLITICAL

India was initially a closed economy, there was numerous restrictions and to carry out
business law was imposed for foreign companies. Also there are extremists who are in
opposition to FDI's this is the reason for the shutdown of Walmart. But as the time passed,
there was a slowdown in the growth by the imposing such restrictions so government
started opening up. Since these firms have huge reserves, they also force government to
pass laws on their favor against promise of financial back up. Large MNCs have blackmailed
their way through many government charges and penalties.

ECONOMIC

The lifting of trade restrictions and import duties actually provided customers with greater
number of products to choose from and enhance competition which led to lower prices.
Hence, there was decrease in the inflation and improvement in quality of products provided
to gain greater market share, which is also helping in pushing up productivity and thus
increase in the exports. As all the import duties were not lifted hence domestic market was
protected through tariffs as it was lifted from the items where the market was already
established, however where market was still developing duties were still levied upon.

This will also enable foreign companies present in India to import stuff from abroad and sell
it in India and make more efficient use of their extensive distribution network on the other
hand it also provides opportunities to local suppliers and distribution to offer their services
to companies who do not exist in India but want to sell their products here. Now companies
can import from anywhere there will be more options for them to look for suppliers in the
world and source the best amongst them in terms of price and quality.

SOCIAL

The social implication of advent and progress of FMCG industry is positive as people’s life
style will improve. All FMCG products are more hygienic and healthier than lose products
offered on streets and this definitely means low mortality ratio in future as more and more
people will start consuming these packaged goods. Apart from this, it is the fourth biggest
sector in India which contributes about 2.5% to GDP and creates employment for thousands
of young graduates each year. This sector is dominated by MNCs and these companies
invest millions of dollars each year to improve the living conditions of poor in India, for
example Hindustan Unilever Limited started a “Project Shakti” in rural areas of India in order
to empower women there to earn some money for themselves and for their families. In
developing countries like India not all the poverty eradication, education and other
developments projects can be taken by government. So any initiative by these firms is a
huge help.

TECHNOLOGICAL

The technology part comes easy to this sector as the manufacturing setup required for these
kinds of products is not as high tech as other industries plus it can be outsourced through a
third-party contract which is very common in this industry. Initial setup cost is a little high
that’s why not all the starters can think of entering in this market plus it is owned by giants
like Unilever and P&G who make it difficult for other companies to survive through their
strategic moves. The distribution setup is difficult to establish with reliable links and this is
where new entrants fail most. They make the product but cannot make it available to all the
markets at the same time.
ENVIRONMENTAL:

These FMCG manufacture products from raw materials that are grown in the fields and are
result of agricultural activities in the region, therefore they are careful in protecting and
preserving the environment. Some of the efforts include setting up of green houses, use of
herbal waste, supporting rag pickers, establishing green buildings and procedures that are
green, minimize consumption of clean and fresh water. The constraint on energy is reduced
by using alternative sources of energy like herbal waste. (Gulati, 2015). Government also has
made some anti-dumping laws which prohibits manufacturing facilities to contaminate any
clean source of water flow.

LEGAL

Government replaced various indirect taxes imposed on FMCG with a more direct approach,
i.e. GST. This will help in lowering prices as all the taxes imposed increase the cost of
production and producer passes it on to consumer. They cannot underpay agricultural sector
for profit maximization, also they cannot fool customers in any way by claiming something
for their product which it is incapable of doing in actual. The law also forbids FMCG industry
to artificially increase prices by making a product scarce. The law for marketing products
states that one company cannot mock product of another company by explicitly taking its
name or showing its picture. But the most important law that authorities miss is consumer
privacy protection rights. These firms tend to find out contact details of their consumers and
potential ones and then spam them through every channel.
Britannia Industries Limited is an Indian food-products corporation. Founded in 1892 and
headquartered in Kolkata, it is one of India's oldest existing companies. It is now part of
the Wadia Group headed by Nusli Wadia. The company sells its Britannia and Tiger brands
of biscuits, breads and dairy products throughout India and in more than 60 countries across the
world.[2] Beginning with the circumstances of its takeover by the Wadia group in the early 1990s,
the company has been mired in several controversies connected to its management. However, it
enjoys a large market share and is exceedingly profitable.

SWOT Analysis

STRENGTH

- Brand portfolio:
Only company in India having the most variety of Bakery products in all the segments
which is for all the income groups. This had help Britannia acquiring the highest
chunk in the share market. It has 30% of the market share in India’s biscuit category.

- Serving the Indian market since more than 120 years. Started more than 123 years
ago where they baked golden brown biscuits which were for officers of British raj
and their families and for the people of high standards.

- Market penetration and distribution:

They are present in India with huge SKU’s and making their products available
everywhere in the nation though its robust distribution system, Britannia has really
captured every nook and corner of the nation.

- Market leader
WEAKENESS:

- Too much dependent on the biscuit industry:

 Britannia’s 75% revenue come from the biscuit industry and hence they are too
much dependent on the biscuit industry. Today we have so much competition in the
market, so just being dependent on one industry can hamper their survival.
- Very low overseas presence:
Apart from India, they are only present in Oman and Dubai that too through
subsidiaries only. Their overall exports of product is very less as compare to their
potential.

OPPORTINITIES:

- Overseas market:
They have a great opportunity with them to expand overseas and the amount of
potential they have, indeed they can do great.
- Emerging dairy industry-
With great flavor, taste and color Britannia can really go up and grab the major
chunks in the Market. Also, improve the market demand for the healthier products.

THREATS:

- High competition in the market:

With great increase in the market players (already existing local players- Anmol,
Priya etc.), It’s becoming very hard for the company to differentiate themselves from
others.
- Price of raw material:
Increasing price of commodities would hamper the company and the price of the
end product. And further increase can hamper the profitability of the company.

Porter’s 5 Force:

Bargaining power of Buyers: This force is specifically focusing on the ability of customer to
bargain about the prices & let them down. For Britannia the bargaining power of buyer is
considered very high. The price has a huge impact on this industry so increasing a meager
amount of price of the products can tend to shift a customer from one brand to the other
brand.
Bargaining power of Suppliers: If any company has a smaller number of suppliers, the
impact of it will be more. The significant suppliers of Britannia bakery items are “wheat” &
“sugar”. It also includes the other agricultural products. Considering on the daily items, the
suppliers are “milk”. The bargaining with these supplies is tough as the cost of the,
significantly impacted by the production of the inputs. Due to increase demand of such
product, the price is also increasing. Beside them there are other suppliers as well which are
utilized for packaging materials. So the bargaining power of suppliers is moderate for
Britannia.

Threats of New Entrants: Threat of new entrants on this market is very high. But new
entrants have to face an intensive competitive environment. They also have to take
measure to process the distribution channels. The regulation that are provided by the
government when it comes to food seems to be quite unappealing.

Threats of the Substitute Products: The substitutes of Britannia are savory, cereals, fruits &
other fast processing food items which can be used in replacement to the biscuits. Dairy
products have even more percentage of threats. Hence the percentage of risks that might
occur from the substitutes for Britannia is moderate.

Rivalry of Existing Players: The growth rate of Britannia is 27%. It has a large number of
competitors including Parle & ITC majorly due the same nature of the product both are
creating. The core earnings of Britannia are from Biscuits & Parle, ITC are also known for
their biscuit products. Britannia is also producing dairy items & the leader of dairy industry
is Amul. So the rivalry sector of Britannia is very high.
Johnson & Johnson is an American multinational corporation founded in 1886 that develops
medical devices, pharmaceutical and consumer packaged goods. Its common stock is a
component of the Dow Jones Industrial Average and the company is ranked No. 37 on the
2018 Fortune 500 list of the largest United States corporations by total revenue. J&J is one of
the world's most valuable companies.

SWOT Analysis:

STRENGTHS:

- Johnson and Johnson use a flexible business model that allows to rapidly adapt with
the market changes and trends. Also, the problem-solving techniques and
innovation.
- This model has given rise to various medical devices and many other consumer
healthcare products.

WEAKNESSES:

- The company is dependent upon few products and small niche drugs which can be
riskier for longer term.
- There were few protests against some of the Johnson and Johnson products, which
has led to damage in the reputation.

OPPORTUNITIES:

- With a diverse portfolio of solutions, there are many untapped opportunities for
cross selling products. This includes medication, therapy, pharmaceuticals,
diagnostics etc.
- The diagnostic market is likely to grow more, which positions Johnson and Johnson
as a first mover in many applications.
- Many countries have started banning generic medicines, which gives Johnson and
Johnson a great advantage.
THREATS:

- There have been many product recalls, which can hamper the company’s credibility
and image.
- Generic pharmaceutical products are available at a very lower price, which acts as a
major threat to Johnson and Johnson.

Porter’s 5 Force:

Bargaining power of Buyers: Buyers of Johnson & Johnson products include doctors,
wholesalers, retailers, pharmacist, insurance companies & individual’s users also. When it
comes to Wholesaler or retailers, there are very few suppliers available. When it comes to
doctor, pharmacist or physicians, their bargaining power is also low. But the individual buyer
has some power to bargain else they can switch to other product but the brand value of
Johnson & Johnson has gained itself, the bargaining power of customer remains low.

Bargaining power of Suppliers: The suppliers for Johnson & Johnson include the suppliers
required in the manufacturing of medical equipment as well as medicines. So Johnson &
Johnson need to have credible & reliable suppliers. They usually have contractual
agreement with suppliers to maintain long term relationship. The suppliers also have
invested huge cost as well. The bargaining power of supplies is low in this case.

Threats of New Entrants: The barriers to this industry include expenses involved in
researching to enter & survive in this industry, the expense involved in production &
manufacturing of medicines & medical devices. All these factors hinder the easy entrance of
new competitors in this industry. Johnson & Johnson have maintained good brand name &
consumer’s trust. So the threat of new entrants for Johnson & Johnson is low.

Threats of the Substitute Products: There are very few substitutes available for Johnson &
Johnson in the market. Some of substitutes that consumer may consider buying can be store
brands or Natural Herbs. But Natural Herbs are very rare & expensive so they pose a
moderate threat to Johnson & Johnson. When it comes to beauty products, Johnson &
Johnson is facing huge competition as it is very competitive market but Johnson & Johnson
does not lose out on its loyal customer.
Rivalry of Existing Players: The competition in this industry is high in terms of the
companies available in the market but they cannot compete more in term of pricing. In this
industry usually companies merge or acquire companies that tend to increase their
business. They also try to diversify their range of products in the market. In such term,
Johnson & Johnson is performing well as is competing globally. So, the competition in the
industry for Johnson & Johnson is moderate.
SWOT ANALYSIS

STRENGHTHS

1.Strong Brand portfolio: Target wide range of customers with a broad brand portfolio
GCPL is today, one of the widest known FMCG companies in India. The statics shows
over 700 million people use its product every day which enables Godrej to reach
diversified range of customer segments.

2.Strong Positioning in multiple categories:There are many categories in which GCPL is

continuously leading the market position. These category include liquid detergents, hair
colors, household insecticides and soap section.

3.Strong marketing and distribution: GCPL products are having one of the highest
popularity not only in India but in the entire world. This is due to their effective
marketing and strategical distribution system that they are enjoying high brand
awareness.

4.Continuous Innovation:The main focus of Godrej was on innovation and expansion of

its product portfolio by launching new products and brand extension. There major focus
is on robust R&D facilities towards improvement in product quality, pricing, cost saving
structure, innovative packaging and new and better distribution channels.

5.Presence in the Global market:Godrej products are spread over more than 60
countries which include South America, Kenya and Argentina etc. with share in revenue
of more than 48% of total revenue. GCPL is looking forward to expand globally especially
in emerging economies.
WEAKENESS:

Lack scale:Even after achieving a strong brand portfolio it lacks scale like that of its
competitors ITC & HUL. Godrej lack scales in volume as a leader.

Stiff Competition decreases share in the market:With emerging competition and new
players in the market, stiff competition limits the market share in the FMCG industry.

OPPORTINITIES:

Expansion through Acquisition:The transformation of GCPL from domestic to a

multinational brand has widespread itself to over 60 countries. GCPL is expanding in
emerging markets by acquiring local brands in order to improve its market penetration
strategy.

Emerging rural markets:Rapid growth in technology driven distribution system enables

Godrej to maintain its demand-supply capitalization. This will improve its bottom line.

Improving Lifestyle:The growth in personal care market highlights that with the increase
in purchasing power, the lifestyle of people is also improving hence there will be
increment in demand of personal care products.

THREATS:

Intense price competition:Company like Patanjali with lower pricing strategy is a threat
to the whole industry. FMCG industry is facing intense competition not only in MNC’S
but in domestic market too.

Counterfeit Products:

It affects the majority of sales of FMCG industry. It also affects the brand image and
revenue share of the company.
 Availability of unbranded products:

Godrej or other brand of this industry is facing a severe competition with unbranded
products in the rural market as the population there is price sensitive and brand
insensitive.

PORTER’S 5 FORCE ANALYSIS

Threat of new entrants:

The barriers include the cost of reanalyzing to enter and survive in the industry. This
hinder the ease of entrance of new competitors. In FMCG industry the threats of new
entry is moderate but the demand for FDI in retail sector is effecting company’s position
as it allows more international company to enter in the domestic market.

Threat of substitution:

With the presence of multiple brands in the domestic and international market, there is
high availability of perfect substitutes for the buyers. It narrowed down the scope of
product differentiation under many brands which resulted in cut throat price war.

Bargaining power of Buyers:

The bargaining power lies highly with the buyers due to the availability of perfect
substitutes in the market. The switching cost for the buyers is really low hence price war
will play a major role in this but being a renounced brand, the loyalty of customers
towards brand has its own importance.

Bargaining power of suppliers:

The bargaining power of suppliers is low. The company make sure about the reliability
while choosing its suppliers as they need standardized and customized suppliers. Low
switching cost induces the customer’s shift from the product. It is also because of
availability of same or similar alternatives.
Competitive rivalry: The industry is highly competitive in terms of companies available
in the market. So the rivalry is very high. There is a cut throat price competition between
companies of different brand and also between unbranded products especially in rural
areas. The exit barriers are low due to availability of perfect substitutes.
SWOT ANALYSIS:

STRENGTHS:

Diversified conglomerate: Emami group has the highest existence in the personal care
industry. It also holds the leadership position in different other industries such as paper,
Edible oil, bio diesel, solar power, cement and contemporary, writing instruments and
health care.

Dynamic Leadership: Emami group has one of the strongest work force of 25000 employees
including professional leaders and dynamic management teams. The biggest strength of
Emami group is its human resource.

Progressive mindset: Emami group have a very strong focus on customer needs and
preferences. The company is always seem to be involved in continuous innovation as per
market requirements. Emami’s success is highly related or can be measured by its ability to
evolve strategically to great heights with a focus on sustaining trust of its customers.

Expansion Globally: Emami has its footprints all over the globe. Its global presence in
around 60 countries is the main strength of the brand. Emami strength lies in its capability
to expand its infrastructure which enables it to cross the domestic boundaries and reach
international markets with a focus in middle east.

Strong brand rich portfolio: The company has wide variety of sub brands almost in every
sector which made its portfolio strongly rich. This helped the company to reach 100 crores
plus brands.

Local Culture: The company major strength lies with its ability to understand its customers
need and requirement in a perfect way which differentiate the company from its rivalries.
WEAKNESSES:

Technology Limitations: The scope of investing in technology is lower in Emami. Also when
it comes to small sectors the scale of economy has lesser scope.

Competitor’s brand: With the presence of perfect substitutes in the market the company
may lose its share in the market in many product categories.

Controversy: The company has entered into controversy in 2007, for its advertisement of
skin whitening cream. The company was accused for spreading racism.

OPPORTUNITIES:

Product Expansion: As the company is diversifying in various other sectors, there is a huge
opportunity into emerging categories. This will give a way to expand its business.

Growth in retail sector: Emergence of FDI in retail sector has open a huge opportunity for
business like Emami to expand its horizon towards international boundaries to cater to this.

Changing lifestyles: Changing lifestyle has everything to do with the purchasing power of
the consumers. As the purchasing powers rises there is a huge chance for the industry to
flourish.

THREATS:

Increase in competition: With the availability of perfect substitutes in the market that to of
big brands is a serious threat to the company. Not only big brands but small unbranded
companies is also threatening by capturing lower segment of society or rural areas.

International Brands: Emerging of FDI in retail increases bargaining power of big retailers
who are able to negotiate for high margins is a serious threat for the company.
PORTER’S 5 FORCE ANALYSIS:

Threat of new entrants:

There is low barriers to entry and exit. As the product is nor differentiated and availability of
substitute to buyers is an easy way, no. of sellers of substitutes is also high so it is easy for
the firm to exit the industry.

Threat of substitutes available:

Ease of availability of perfect of nearby substitute in the market is a serious threat to the
brand. The substitute is rivalry brand has a cut throat price war to capture the market share.

Threat of bargaining power of buyers:

The bargaining power of buyers seems to be high due to the availability of substitutes easily.
Emami made many appealing advertisements through television which only helped in
increasing sales regardless of increasing prices.

Threat of bargaining power of suppliers:

If the supply of Emami products is sufficient to the need and demand of the market then
there will be threat to bargaining powers of suppliers.

Threat of competitors:

The threat of competitors is very high due to large no. of existing brands and also the
entrants of the new brand in the market. Competitors have also used ayurvedic platforms to
differentiate their products from that of the competitors such as Dabur and Ayur.