a.

) Marico

Marico is currently operating in 25 countries, in the emerging markets of Asia and

Africa. Determined to make a difference to FMCG (in line with their slogan, make a
Difference), Marico has multiple brands in men’s grooming, fabric care, edible oils,
skin care, hair care and health foods. Marico’s household brands include Parachute,
Parachute Advanced, Saffola, Hair & Care, Nihar, Nihar Naturals, Livon, Set Wet,
Mediker and the global business offers brands such as Parachute, HairCode, Fiancée,
Caivil, Hercules, Black Chic, Isoplus, Code 10, Ingwe, X-Men and Thuan Phat.
Marico products are used by 1 out of 3 Indians which makes it one of the best FMCGs
in the business. Their annual turnover was INR 63 billion as shown in the Annual
report of 2017-2018

1
 Strengths:
1. Excellent distribution network and product availability
2. The product portfolio of Marico has brands covering Edible Oil, Hair Oils, Skin
Care, Fabric Care, etc.
3. Popular brands, good brand visibility and excellent advertising of products has led
to strong brand loyalty
4. Experience management and good R&D
5. Marico is present in more than 25 countries across Asia and the African continent.
6. Marico reaches over 2.5 million outlets and around 130 million customers
Weaknesses:
1. Market share is limited due to presence of other strong FMCG brands
2. Marico products has stiff competition from big domestic players and
international brands
Opportunities:
1. Tap rural markets and increase penetration in urban areas
2.Mergers and acquisitions to strengthen the brand
3.Increasing purchasing power of people thereby increasing demand

Threats:
1. Intense and increasing competition amongst other FMCG companies
2.FDI in retail thereby allowing international brands
3. Competition from unbranded and local products

b.) Hindustan Unilever

HUL is a subsidiary of Unilever, one of the world’s leading suppliers of food,

homecare, and personal hygiene products with offices in 190 countries. Hindustan
Unilever is one of the best FMCGs that there is, serving more than 2 billion happy
consumers for 85 years. HUL has over 35 brands across 20 categories such as soaps,
detergent, skincare, cosmetics, tea, toothpaste and some famous names include Surf
Excel, Dove, Lux, Lifebuoy, Clinic Plus, Wheel, Sunsilk, Knorr etc. The Annual
Report of 2017-2018, Which Shows that the Company has 18,000 employees and has
sales of INR 34619 crores.
Strengths:
1. HUL is a part of the Unilever group, hence strong brand equity
2. It has over 18000 employees
3. Hindustan Unilever has a reach of 6.4 million retail outlets which includes direct
 reach to over 1.5 million retail outlets
4. Two R&D centres in India in Mumbai and Bangalore
5. Products with presence in over 20 consumer categories with over 700
million Indian consumers using its products
6. As a part of CSR, HUL has initiatives like project Shakti, plastic recycling,
women empowerment etc
Weaknesses:
1. Market share is limited due to presence of other strong FMCG brands
2. Hindustan Unilever faced controversies like skin lightening creams, pollution etc
Opportunities:
1. HUL can tap rural markets and increase penetration in urban areas
2.Mergers and acquisitions to strengthen the brand
3.Increasing purchasing power of people thereby increasing demand
Threats:
1. Intense and increasing competition amongst other FMCG companies can
affect business of HUL
2. FDI in retail thereby allowing international brands
3. Competition from unbranded and local products can hurt Hindustan
Unilever's market

c.) Colgate-Palmolive

Colgate-Palmolive grew from a small toothpaste and candle manufacturing unit in the
19th century New York and more than 200 years later, a global leader in personal
healthcare products. The popular brands include the Colgate Toothpaste, Colgate Plax
Active Salt Mouthwash, Halo Shampoo, Palmolive Naturals and Protex Soap. Colgate-
Palmolive’s core values of caring, global teamwork and constant improvement makes
them a prestigious name not only in the Indian Fast Moving Consumer Goods industry
but globally. According to the Annual Report of 2017-2018, the Company has roughly
38000 employees and has sales of INR 12045 crores.
Strengths:
1. It is one of the biggest brands in the personal care consumer products industry
2. It has over 38000 employees globally
3. One of the market leaders globally with excellent R&D
4. Colgate focuses on four core businesses: Oral Care, Personal Care, Home Care and
Pet Nutrition
 5. Colgate has excellent reach and distribution and its products are available in over
200 countries
6. Excellent advertising and brand visibility of products with a strong
customer loyalty for brands
Weaknesses:
1. Market share is limited due to presence of other strong FMCG brands
2. Fake brands are supplied under their brand names
Opportunities:
1. Tap rural markets and increase penetration in urban areas
2.Mergers and acquisitions to strengthen the brand
3.Increasing purchasing power of people thereby increasing demand

Threats:
1. Intense and increasing competition amongst other FMCG companies
2.FDI in retail thereby allowing international brands
3. Competition from unbranded and local products

d.) Dabur

Dabur is one of the India's largest Ayurvedic medicine & natural consumer products
manufacturer. Dabur demerged its Pharma business in 2003 and hived it off into a
separate company, Dabur Pharma Ltd. German company Fresenius SE bought a
73.27% equity stake in Dabur Pharma in June 2008 at Rs 76.50 a share.

2.3.1 Dabur
Dabur India Limited came into existence over 100 years ago in 1884 at Calcutta. The
founder, Dr.S.K.Burman, was a practicing allopathic doctor. At that time Malaria, Cholera
and Plague were the common diseases. He was a physician who brought ayurvedic medicines
to the masses of Bengal. Initially established as a proprietary firm for the manufacture of
chemicals and ayurvedic drugs it was later on 19th November 1930 incorporated as a private
limited company. Late Shri C.L. Burman, son of late Dr. S.K. Burman and his son late Shri
P.C.Burman in the name of Dr.S.K. Burman Pvt. Ltd. to expand the operations by setting up
production facilities at Garia and Narendrapur, West Bengal and Daburgram, Bihar. Dabur
(Dr.S.K.Burman) Pvt. Ltd. was merged with Vidogum and Chemicals Ltd. w.e.f. 1st July
1985 and the amalgamated company was renamed DABUR INDIA LIMITED and a fresh
certificate of incorporation was issued to that effect. In 1970, the bulk of manufacturing
facilities were shifted from West Bengal to Faridabad in Haryana. In 1975, vidogum and
chemicals were incorporated in technical collaboration with Unipekin AG (Switzerland) for
the manufacture of edible grade and industrial grade Guar gum powder at Alwar in Rajasthan.
In 1977, a modern automated plant was set up in Sahibabad (U.P.) for the manufacture of
Chyawanprash, Asavrishthas, Hair oil, Tooth powders, Hajmola, and other Ayurvedic
specialties. Certification for production of toiletries and food grade products was issued on
13th October 1986 by the registrar of Delhi and Haryana to the company, Dabur Private
Limited, a closely held Public Limited Company. It was incorporated as a Private Ltd. The
company in the name of Dabur (Dr. S.K.Burman) Pvt. Ltd. From a humble beginning in
1884, a manufacturer of traditional medicine in Calcutta, Dabur has come a long way to
become a multifaceted multinational, multi-product, modern Indian corporation with a global
presence. It now enjoys the distinction of being the 2nd largest FMCG Company and is
praised to become a true Indian Multinational. The main plant was set up in Sahibabad (U.P.)
in 1977 for manufacturing of Chyawanprash, hair oil, tooth powder, hajmola, and other
ayurvedic medicines and food products etc. Dabur's main line of business is in the sphere of
Health care, Personal care, and Beauty care. Its strength lies in natural and herbal
preparations. Dabur's corporate philosophy has always been ahead of its time. The founder's
initial success was mainly due to his direct main campaigns- a technique that became very
popular nearly a century later. The company was one of the earlier Indian companies to have
fully equipped R & D lab as early as in 1919. Today, the company has its own mainframes
and computers are a way of life here. Dabur is also an ISO 9002 certified company. The
certification was obtained in1995 by SGS YARSLEY international services Limited U.K.
Dabur's revenue today exceed Rs.800 crores with plans to achieve Rs.2, 000 crores by year
2003. Dabur has 34,000 shareholders with a market capitalization of over Rs.1,400 crores.
Dabur has 11 manufacturing plants in India and Nepal and a licensee in theMiddle East. It has
manufacturing base in Egypt also. The company has over 4,000employees with around 1,500
looking after sales and marketing functions. The Indian market is being served through a
transactional network of sales offices and carrying and forwarding agents. The company has
its offices in London, New York, and Moscow. Dabur products are being exported to around
50 countries. Dabur portfolio is exceeding 500 products of FMCG and health care products
 Pie chart 1

Pie chart 2
From the Import and export data we can observe that Dabur’s biggest export market is the
Middle East comprising of 31% of total international sales, Dabur should focus on increasing
the sales in this region as it has the potential to cross 40% of total sales by 2025, since Dabur
Egypt witnessed a drastic impact due to inflation and devaluation of currency is recent past,
Dabur should not risk its business by expanding the product line here, instead it can invest in
South Asian markets such as Sri Lanka and Myanmar, Sri Lanka is a safe bet as the market
share is growing in double-digits compared to any other International business.
From the Import and export data we can observe that Dabur’s biggest export market is the
Middle East comprising of 31% of total international sales, Dabur should focus on increasing
the sales in this region as it has the potential to cross 40% of total sales by 2025, since Dabur
Egypt witnessed a drastic impact due to inflation and devaluation of currency is recent past,
Dabur should not risk its business by expanding the product line here, instead it can invest in
South Asian markets such as Sri Lanka and Myanmar, Sri Lanka is a safe bet as the market
share is growing in double-digits compared to any other International business.

2.3.2 Porter’s Five Forces Framework - Dabur

Figure 4

Threat of Substitutes Products:

 Dabur a leader in Herbal Digestives where the product has 90% of the market share
 FMCG or Healthcare products especially Ayurvedic, hardly had substitutes until a
couple of years ago, but now with Patanjali taking over the Ayurvedic segment of the
Market, Dabur is having a tough time keeping up with the profits
  Dabur therefore has to constantly re-invent its existing product lines in order to cope
up with the innovations of its competitors
Threat of New Entrants:

 Dabur holds a 100-year legacy in the market, it holds the first mover advantage
 The brand loyalty is so strong that the new entrants find it difficult to position
themselves in the market
 There are no significant entry barriers in the Ayurvedic segment
Bargaining Power of Customers

 The Bargaining Power of Customers has increased dramatically due to a wide range
of available choices from competitors, both local and global
 Dabur has to come up with a strategy to keep abreast with the increasing competition
by improving the quality and reducing the prices over the period
Bargaining Power of Suppliers

 100 years presence - Dabur has a very strong bond with the suppliers
 Has a policy of accountability to stakeholders – be it customers, shareholders,
employees or suppliers (who have a vested interest in making it all happen)
Rivalry Among Existing Competitors

 Key players and competitors of Dabur India currently are

Hindustan Unilever Ltd, Tata Tea, Nestle India Ltd., Britannia Industries Ltd.,
Colgate Palmolive Ltd., Marico Ltd., Galaxo Smithkline consumer, Cadbury India
ltd., Reckitt Benckiser Ltd., Procter & Gamble
E.g. - Himani, Baidyanath and Zandu for Dabur Chyawanprash, Marico, Keo Karpin,
HLL and Bajaj for Vatika Hair Oil Dabur has to constantly relook its strategy and
keep reinventing and branding, in order to maintain and increase its market presence

Swot Analysis
Strengths

 Century Old Company

 Established Brand
 Ayurvedic/ herbal Product line
 Leader in Herbal Digestives where the product has 90% of the market share
 Core knowledge of Ayurveda as competitive advantage
 Strong Brand Image
 Strong Distribution Network
 Extensive Supply Chain
 R & D - a key Strength
 Weakness

 Seasonal Demand (like Chyawanprash in winter and Vatika not in winter)

 Profitability is uneven across product line
 Low Penetration (Chyawanprash)
 Limited differentiation (Vatika)
 Unbranded players account for 2/3rd of the total market (Vatika)

Opportunities

 Extend Vatika brand to new categories like Skin Care and body wash segments
 Market Development
 Export Opportunities
 Innovation
 Increasing income level of the middle class
 Creating additional consumption pattern

Threats

 Existing Competition like Himami, Baidyanth and Zandu for Dabur

Chyawanprash and Marico, Keo Karpin, HLL and Bajaj for Vatika Hair Oil)
 New Entrants
 Other fields of medicine- Allopathic and Homeopathic

Value Chain Analysis

Primary:

 Inbound Logistics:
 Long term contract with raw material suppliers
 Personnel at regional offices for overseeing the smooth transit of goods.
 Transparency and monitoring through deployment of IT all transactions
through ERP (enterprise resource planning).
 Efficient storage facilities – easy storage and retrieval
 Operations:
 Ayurveda –special competence.
 Apprentice Trainee Course - ensuring stable source of skilled manpower.
 Outbound Logistics:
 Distributors, all across the country.
 Long term contracts with transporters–higher volume of business to
transporters ensures competitive price.
 Regional Sales Office linked through ERP application.
 Efficient security system for prevention of any kind of pilferage.
 Marketing and Sales:
 Large network of dealers.
  Structured approach to understanding the requirements of individual customers
– QFD’s (quality function deployment) conducted at regular intervals.
 Clear identification of product requirements, leading to development of
innovative products.
 Quick assessment of the changing market dynamics and consumer.
 After Sales (Services):
 Efficient collection of data from field and communication to the respective
plants.
 Pan India presence.
 Large network of distributors & retailers

Secondary:

 Procurement:
 E-procurement initiative.
 Long term relationships with a stable and loyal pool of suppliers.
 Technology driven procurement – SAP and VCM.
 Localized supplier base at manufacturing locations – low inventory levels.
 Infrastructure:
 Multi–Location facilities.
 Best in class prototype building facilities.
 Technology – ERP application.
 Large product portfolio.
 Technology:
 Approximately 2% of the annual profits of the company invested in research
and development.
 Knowledge portal – helps employees keep abreast with the latest technologies.
 Extensive prototype building and testing facilities.
 Formal benchmarking process.
 Human Resources:
 Vast pool of technically competent managers.
 Focus on development of managerial capabilities - executive training
programs at premier business schools.
 Career advancement schemes.

.
2.3.3 Financial Forecasting of Dabur

Annual Income
Statement Data
Actuals in M INR Estimates in M INR
Fiscal 2016 2017 2018 2019 2020 2021
Period March
112
Sales 84 360 77 014 77 483 87 177 98 682 292
EBITDA 15 198 18 073 16 174 18 479 21 380 24 714
Operating
13 860 16 644 14 553 17 101 19 826 22 825
profit (EBIT)
Pre-Tax
15 572 16 104 16 931 19 370 22 614 26 638
Profit (EBT)
Net income 12 527 12 769 13 544 15 513 18 219 21 197
P/E ratio 35,4 38,5 42,6 46,9 40,2 34,4
EPS ( INR ) 7,08 7,21 7,66 8,85 10,3 12,1
Dividend per
2,25 2,25 2,50 3,68 4,25 4,94
Share ( INR )
Yield 0,90% 0,81% 0,77% 0,89% 1,02% 1,19%
Reference price
250.75 277.35 325.95 414.95 414.95 414.95
( INR )

According to the Q2 2018-2019 Earnings Consolidated revenue from operations grew at

8.5%. Domestic FMCG business recorded growth of 8.6% on the back of volume growth of
8.1%. Sales growth ex Foods was 10.2%.
Healthcare vertical reported growth of 10.6%. Health supplements grew by 12.3% led by
double-digit growth in both Chyawanprash and Honey. Digestives category recorded growth
of 10.8% on the back of good growth in Hajmola tablets and Pudin Hara. New Variants,
focus
marketing inputs and distribution expansion contributed to driving this growth. OTC and
Ethical grew by 7.7%
HPC vertical posted growth of 10.2% led by strong performance in Hair Care, Home Care
and Skin Care. Hair oils category registered growth of 11.1%. Volume market share in hair
oils moved up by 120 basis points vis-à-vis same quarter last year. Shampoos posted a
robust performance growing by 49%. This is the fourth consecutive quarter in which the
shampoo category has grown at 30% plus.
International business reported a growth of 8.9% during the quarter. Egypt market continued
to perform well with constant currency growth of 27%. Sub Saharan African business
posted constant currency growth of 16% while SAARC markets grew by 13%. Turkey
reported growth of 16% in constant currency, although devaluation of the Lira impacted the
translated INR growth. GCC markets had a soft quarter on account of consumption pressure
and sharp decline in categories in the region. Operating margins in international declined by
around 160 basis points on the account of increased BTL and adverse currency impact.

Graph 4
Table denoting various ratios that were calculated (Left) as well as the ROE (Right)

Insights: As can be seen in the table given, the value of current ratio has gone up from 0.83 to
0.95 over the span of one financial year. From this we can say that Dabur is employing proper
inventory management, strict standards for collecting receivables or low burn rate.
Quick ratio has increased from 0.42 to 0.48 which means that they were sufficiently able to
meet their short-term liabilities. In 2017 and 2018, the ratio was lower than 1 which usually
means that the company was also relying heavily on its inventory and assets but it is slowly
regaining its position.
The Asset Turnover Ratio has decreased significantly from 1.53 to 1.32. This means that the
inventory of the company is not being used efficiently to generate sales.
Net Profit Margin has increased from 18.86 to 19.17 indicating that Dabur is buying materials
at a low cost so there is no issue with its supplier relationships.
Inventory Turnover Ratio has improved as well, going down from 8.96 to 7.96. A high
inventory turnover ratio indicates large discounts or high sales.
ROE has gone down every financial year for the last 5 years. This indicates that the company
is incurring a steady loss.
Overall, we can say that Dabur has some problems with respect to its relying heavily on its
inventory and assets. The inventory is not being used properly.
2.4 Growth opportunities in Indian FMCG sector
Rural Market: Leading players of consumer products have a strong distribution network in
rural India; they also stand to gain from the contribution of technological advances like
internet and e-commerce to better logistics. Rural FMCG market size is expected to touch
US$ 220 billion by 2025
Innovative Products: Indian consumers are highly adaptable to new and innovative
products. For instance, there has been an easy acceptance of men’s fairness creams, flavoured
yoghurt, cuppa mania noodles, gel based facial bleach, drinking yogurt, sugar free
Chyawanprash.

Premium Products: With the rise in disposable incomes, mid and high-income consumers in
urban areas have shifted their purchase trend from essential to premium products. Premium
brands are manufacturing smaller packs of premium products. Example: Dove soap is
available in 50g packaging. Nestle is looking to expand its portfolio in premium durables
cereals, pet care, coffee, and skin health accessing the potential in India.
Sourcing Base: Indian and multinational FMCG players can leverage India as a strategic
sourcing hub for cost-competitive product development and manufacturing to cater to
international markets
Penetration: Low penetration levels offer room for growth across consumption categories.
Major players are focusing on rural markets to increase their penetration in those areas.
Online FMCG: It is estimated that 40 per cent of all FMCG purchases in India will be online
by 2020, thereby making it a US$ 5-6 billion business opportunity
Start-up Ventures: In May 2018, RP-Sanjiv Goenka Group created a Rs 1 billion (US$
14.92 million) venture capital fund to invest in FMCG start-ups
Key M&A deals in the Industry

Table 1
03
Industry Metrics

OUT OF STOCK RATE (OOS)

This FMCG KPI shows the moment of the day and of the week where your inventory is
exhausted, and how much of it is unavailable. Managing your inventory is of course a must-
do in the fast-moving consumer goods industry. You need to have an even-more accurate
vision of your stocks because of the short sales cycle time and high demand: evaluating the
Out of Stock Rate will give you a great advantage in terms of supply. You should also know
that around 80% of the ‘stockouts’ are actually caused by defective shelves replenishment
practices: implementing appropriate internal measures to refill your store’s sections will
decrease the OOS rate. That way, you can easily avoid frustrated customers who in response
tend to switch stores. You should also understand the reasons behind inventory stockouts so
that you can address the causes more efficiently and avoid a situation to repeat itself over and
over.
Performance Indicators Studies for the FMCG industry usually show an average OOS rate of
8% – managing to keep your stockouts below this line is crucial.
DELIVERED ON-TIME & IN-FULL (OTIF)
The OTIF measures the delivery performance within a supply chain: On-Time, In-Full
delivery. It measures several levels of delivery: if the right product was delivered to the
quality standards agreed upon, in the quantity ordered, at the place agreed on, and at the time
expected by the customer – often with a tolerance range predefined. As a supermarket, you
can use this FCMG KPI to compare the performance of your suppliers: how often do they
provide you with what you want, when you need it. It is usually calculated as a percentage
according to the following formula: OTIF = (number of deliveries “OTIF” ÷ total deliveries)
*100. The “OTIF” deliveries used to calculate this percentage should answer a couple of
requirements: they have a delivery date, they measure the date and hour of said delivery,
archive it in the system, and maintain a track record of the reasons behind an order not
“OTIF”.
Performance Indicators Implement the right measures so as to keep your OTIF rate above
90% for a well-performing supply chain.
AVERAGE TIME TO SELL
This FCMG metric is all the more important in the fast-moving consumer goods industry.
Speed being an inherent part of this sector, that deals with a lot of fresh products, the Average
Time to Sell is a crucial KPI to measure. According to the type of items (food and beverages,
personal care, tobacco, household care etc.), the freshness varies and has to be respected to
avoid poisoning and observe the law. Evaluating how long it takes for your products to be
sold will give material for the procurement strategies, but will also help in the inventory
management. Holding items in your inventory incurs costs, such as labour, storage, or freight
costs.
Performance Indicators Ideally, you want the time to sell to be as low as possible, meaning
that you manage to sell most of your inventory within the short deadlines.
PERCENTAGE OF SOLD PRODUCTS WITHIN FRESHNESS DATE
This FMCG KPI calculates the percentage of your inventory sold within the freshness date,
depending on the type of product. On the illustration aside, we see that only 81,4% of the
freshest products needing to be sold within 3 days, are actually sold. Where is that coming
from? Actually, you will always face a trade-off between the availability of your products on
the shelves, and their expiration date. Indeed, if you want to have 100% of your products
sold, that means that your store will have to deal with shelf unavailability at some point – and
this is why many discounters who have such strategy cannot provide you with anything you
want on a Saturday evening, one hour before closure.
Performance Indicators Align your metric’s target with the strategy of your store and what
has the priority: availability at any time, or selling the inventory within due date.
CASH-TO-CASH CYCLE TIME
This FMCG KPI combines 3 ratios: the days of inventory (DOI), the days of payables (DOP),
and the days of receivables (DOR). It represents the time period needed between the moment
a business pays cash to its suppliers, and receives cash from its customers. It is also referred
to as “cash conversion cycle”, and is useful when you need to determine the amount of cash
needed to fund ongoing operations. For fast moving goods, estimating the financing
requirements is crucial for smooth operations. The formula used to calculate the cash-to-cash
cycle is the following: Cash-to-Cash Cycle = DOI + DOP – DOR. A cycle of 40 days means
that a business must support its expenses for 40 days – not more. This is a useful calculation
for forecasting or trying to address an expensive debt for instance.
Performance Indicators The shorter the cycle, the better it is for a company’s operations. A
short cycle means that a business can operate with less cash tied up in operations.
SUPPLY CHAIN COSTS
The Total Costs of Supply Chain gather all the costs associated with the supply chain
management: planning, sourcing, delivering, managing returns, labor, etc. Reducing supply
chain costs can notably increase the profits, without needing to increase sales. The supply
chain costs have a strong correlation with the carrying costs of inventory: to reduce the total
costs, many companies have used strategies to reduce inventory safely. However, you have to
be careful and assess the impact of cost reductions on the supply chain as a whole: cutting on
one part can result in increasing costs elsewhere, which is a waste of time and energy.
Analyse carefully all the changes incurred by a certain cost saving, to avoid such situation.
Performance Indicators Perform a benchmark within your specific sector, and compare your
supply chain costs to those of your competitors.
SUPPLY CHAIN COSTS VS SALES
Directly linked to the previous FMCG KPI, calculating your supply chain costs as a portion
of sales will give you an understanding of how much you are spending relatively to the
whole. By doing such a spend analysis, you can identify where you could do savings. As
stated above, savings are a good thing if made soundly: cutting costs here that increase the
operations there is a useless hassle. There are many benchmarks out there comparing the
costs of supply chain to the sales (as a percentage), but you can also perform your own with
specific competitors. In
any case, comparing your ratio to your industry average is a best practice, as it will show
where you stand and if you can do better.
Performance Indicators The industry average for ambient, non-frozen food and beverages
companies is of 7,6%. You should aim at maintaining your ratio below that value.
CARRYING COST OF INVENTORY
The Carrying Costs of Inventory are also referred to as ‘holding costs’, and are calculated as a
percentage of the inventory value. It is essentially all the costs incurred by a business to hold
and store its inventory over a certain time. It includes employee costs, insurance, opportunity
cost, cost of capital, but also the losses caused by obsolescence, pilferage, and damage. You
can calculate them with the following formula: Carrying Cost of Inventory = Inventory
carrying rate * Average inventory value. By determining the carrying costs of inventory,
businesses know how much profit can be made on current inventory. In the fast-moving
goods sector, businesses have a “JIT” (Just in Time) inventory, since most products expire
quickly.
Performance Indicators The ideal, like with any costs, is to reduce them. An efficient
inventory management is key in the matter. Coupling low costs and high inventory turnover
rates is a success factor.
ON-SHELF AVAILABILITY
On-shelf availability (OSA) measures the percentage of time an item is visibly accessible for
sale on shelf by consumers, where they expect it and at the moment, they want to buy it. This
can be performed by a physical audit or an inventory data analysis. When measuring the
OSA, other metrics are also considered: the out of stock rate, the value of sales lost due to
unavailability, or the proportion of lost sales compared to actual sales. This FMCG metric
evaluates the performance of a business to address demand. If shoppers are repeatedly facing
out-of-shelves items in the same store, they will move to another one. An item that isn’t on
shelf might however be available somewhere else in the store, or in the warehouse: to avoid
losing customers who won’t ask for the item, implement good staffing measures that reduce
out of shelves situations.
Performance Indicators An increase in OSA can impact sales significantly: measure your
availability over time and improve it as much as possible.

SALES VOLUME AND MARGIN BY PRODUCT CATEGORY

As for every business, you need to measure the amount of sales performed over a certain time
and the total volume they represent. Calculating how much sales you have done and breaking
it down per category will give you an idea of your strong areas. Comparing it to the target
you fixed (actual sales versus forecasted sales) lets you know if you are on track with your
planned goals – and if not, you have to find the reasons why: were you too optimistic? Were
there unplanned issues, like stockouts or an on-shelf availability always low due to staffing
shortages
Likewise, calculating the sales margin helps you determine how much of every dollar made
in sales, actually stays with your company as gross profit after accounting for the cost of an
item sold.
Performance Indicators Comparing sales margins per product lets you know which are the
most profitable.
04
Findings

Dabur being the leader in ayurvedic products in India is facing tough competition from the
brands such as Patanjali, Emami and other new entrants, due to the new tax laws passed by
the India government such as GST, the tax slab was made equal to all the products, under this
tax slab the foreign brands such as Colgate, Pepsodent are enjoying the benefits of low tax
slab where as the Indian brands such as Dabur as losing the home advantage they had during
the pre GST period. This has become a threat to Dabur’s market in India. This report also
talks about the Supply chain model Dabur follows, the drawbacks that Dabur faces are lack of
Retail stores, lack of doorstep delivery which is a vital factor that separates Dabur from other
companies, we discussed about the role of IT in supply chain mechanism, that improved the
distribution network of Dabur. We also learnt about the International Business market of
Dabur, the Import and Export market that is growing is double digits in South East Asia. By
Porter’s five forces framework it is understood that Dabur has to invest in Innovation and in
new product line as the substitute products are as strong as Dabur in the market, there is no
threat of new entrants to Dabur’s market since it has a 100-year legacy and a strong
positioning in the market. The strengths of Dabur lie in the legacy the company carries,
strong brand, strong distribution network and an extensive supply chain, whereas the
weakness lies in low profitability products and low penetration in the market, Dabur has to
use the opportunity of Increasing spending capacity of the middle class and introduce new
products to them and extend Vatika brand into body wash and skincare line to improve the
business.

 Introduction of GST as a unified tax regime will lead to a re-evaluation of

procurement and distribution arrangements.
 Removal of excise duty on products would result in cash flow improvements.
 The rate of GST on services lies between 0-18 per cent and on goods lies between
0-28 per cent.
 Elimination of tax cascading is expected to lower input costs and improve
profitability.
 Application of tax at all points of supply chain is likely to require adjustments to
profit margins, especially for distributors and retailers.
 Tax refunds on goods purchased for resale implies a significant reduction in the
inventory cost of distribution.
 Distributors are also expected to experience cash flow from collection of GSTs in
their sales, before remitting it to the government at the end of the tax filing period.
 Changes need to be made to accounting and IT systems in order to record
transactions in line with GST requirements and appropriate measures need to be
taken to ensure smooth transition to the GST.
05
Bibliography
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earnings-conference-call-3204291.html
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11796.cms