SITUATION ANALYSIS

(CORPORATE STRATEGY)
“Pat & Jelly” is an FMCG company operating in India. It clocked annual revenues of INR 7,500 Crores in FY2018-19. Majority of
the revenues are obtained from 5 key product lines viz. Ghee, Toothpaste, Shampoo, Soap and Edible Oil. The company has grown
at a CAGR of 27% in last 5 years surpassing its major rivals in overall numbers.

However, its Managing Director Anna Krishnan is a worried man lately. Even though Ghee is the largest contributor, profit margin
is considerably low. Similarly, SBU Shampoo is struggling to cope with industry profitability. Moreover, competition in the Soap
segment is very high and sectoral growth rate is abysmally low.

“Pat & Jelly” hired a consulting firm, Mickey & Donald to help them analyse their product portfolio and suggest the best strategic
course of action. Initial analysis from the consulting firm suggests that Ghee market has matured in India and competition is
heavy. While Shampoo has a very high market share competitor, Pat & Jelly is unable to compete effectively currently. Soap
industry has clearly matured and Edible Oil segment is showing signs of aging. Toothpaste is in growth phase and “Pat & Jelly”
is poised to oust its competitor in next 2-3 years.

Using general information and the data below, can you attempt to bring out the A) possible synergies between the businesses.
B) Is there any corporate advantage of owning each of the five businesses? C)What is your view on the business portfolio going
forward?
Largest
Revenues % of rival’s Brand
Market Sector Profit Industry Pricing Competitive
Brand (in corporate market Value
Sales growth rate Margins profitability Trend Intensity
Crores) revenues share (Cr.)

Ghee 1450 19% 20% 5800 6% 4% 10% 3% 3000 High

Toothpaste 940 13% 40% 2800 10% 14% 8% 4% 2000 High

Shampoo 820 11% 45% 3200 14% 6% 12% 15% 700 Medium

Soap 600 8% 20% 2200 5% 12% 12% 4% 900 Very High

Edible Oil 300 6.5 % 35% 1000 2% 4% 5% -5% 500 Low

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