INTERNAL AND EXTERNAL ENVIRONMENT ANALYSIS

2.1 EXTERNAL ENVIRONMENT

The external environment study is required for Lijjat Papad. It Is a women-only business to
ensure that it responds to the macro-environment effectively and proactively. The macro-
environment, also known as the external environment, contains those aspects outside the
organization’s control or the business.As a result,  these elements cannot be influenced in
favor of It's A Women-Only Business, but they do have a direct impact on the company's
operations.Hence Lijjat Papad must ensure that the external environment is constantly
assessed and reviewed to ensure that it responds to external influences and takes them into
account when making strategic decisions and developing strategies. They employ strategic
model tools on a regular basis to ensure that they are aware of their surroundings. PESTLE
analysis and Porter's five force model, as well as strategic group analysis, are examples that
being use to access and will apply the strategic models and tools to review the business
environment for the company.

2.1.1 Political

Political issues and aspects can affect the business in both direct and indirect ways. Lijjat
Papad's policymakers are quite likely to intervene in the business environment. Commercial
constraints and political stability are also important variables that will determine whether
Lijjat Papad succeeds or fails. Moreover, Lijjat Papad's cost of doing business will be
influenced by tax policies.A rise in corporate taxation (on profits) has the same effect as an
increase in expenses. Another factor in political environment is the government assistance
which is monetary assistance and regulatory assistance. Lijjat Papad can use government
subsidies and aid to help build his business, career advancement, export, and innovation
whereas the government policies and laws can also have an impact on Lijjat Papad. A
country's lack of political stability has an impact on corporate tasks. Political stability is very
important for international organisations like Lijjat Papad.A strong takeover could cause a
legislature to resign. The takeover could result in rioting, plundering, and other natural
disasters. Lijjat Papad's business tasks are disrupted as a result of this.Lijjat Papad can
manage political risk by purchasing political risk insurance. Insurance is used by
organisations with international operations to reduce their risk exposure.The appeal of a
given surrounding market for Lijjat Papad might be influenced by the soundness of a political
framework.
2.1.2 Economic

The economic factors are one of the PESTEL factors. Sub factor that will take into account in
the economic environment is GDP, inflation rates and unemployment rates. Although GDP
per capita is a helpful economic indicator, it only provides a fractional view of the economic
aspects that may influence a country's economy.The higher GDP means more disposable
income and, as a result, more sales for the company. On top of this, higher inflation will
disintegrate the purchasing power of the consumer and will also harm the costs of raw
materials and other inputs that are utilized. A high unemployment rate is also unadvisable as
it dissolves the dispensable income of consumers and will impact overall profitability and
revenues. Fluctuations in interest rates may translate into higher or lower costs for the
purchase or sale of items and administrations provided by Lijjat Papad and thus impact the
the disposable cash of consumers. Maintaining business costs and controlling the final price
of the product can also help Lijjat Papad to fight economic instability by working towards
building a sustainably managed workforce.

2.1.3 Social

Social influences can influence Lijjat Papad business in several ways such as social pattern
and consumer behaviour, social factor and changing consumer needs, social trends in
education, social patterns that makes the company more consumer-centric. Social patterns
affect work trends and patterns and are directly related to the behaviours of consumers.
Thus, this will also have a direct influence on buyer tastes and inclinations, and the specific
kind, structure, and volume of interest for an item or service. The checking of social patterns
will enable Lijjat Papad to reposition its items or administrations to meet the changing
desires and needs of consumers. Social trends of higher education have allowed the
company to access a pool of higher skilled talent and at the same time, also face a more
criticising consumer base. Higer educated market will made consumers more aware of
different product offerings by Lijjat Papad and also more educated and knowledgeable of
different substitutes of a product, as well as become more readily available at different
touchpoints.Lijjat Papad are expected to become more consumer-centric than product-
centric and similarly, the market segmentation and consumer grouping are dynamically
moving towards measures of psychographics and lifestyles to understand the consumer
more.
2.1.4 Technology

The quick pace of technological change at Lijjat Papad may be driven through innovation.As
a business leadership, Lijjat Papad tries to push the limits of present limitations. The
expansion of the Internet and online business has discarded many intermediaries can
communicate and retail directly to the consumers now, or through modern intermediaries for
example eBay and also through current social networks to retail and use e-commerce to
boost sales. technological innovation can be utilized to build on competitive advantage
through several different ways. The technological innovation can be utilized to build on
competitive advantage through several different ways which is Lijjat Papad can incorporate
less expensive production, improved access to clients, improved marketing, improvement in
product quality, and increased levels of business intelligence than the competition. To
flourish in a business world that is quick-paced and receptive to innovative change Lijjat
Papad must stay cautious, always be updated on any technological developments in the
business and industry and should weary of how the company are probably going to influence
its future attractiveness and profitability.

2.1.5 Environmental

Lijjat Papad may be expected to incorporate maintainability standards into their business
methodologies and to help resource allocation choices an this may also be subject to
environmental laws in which will impact and guide its operations to become more
environmentally friendly.The management must measure the connection between natural
activities and budgetary execution.Therefore , must also strategically decide and assesses if
the organization have been estimating the monetary effect of natural and social activities.
Moreover Lijjat Papad also distinguishes and differentiates explicit zones of concern and
impediments to the coordination of environmental sustainability into corporate performance
and strategy, in which also gives explicit direction concerning how organizations can push
toward a superior reconciliation of ecological and social activities in their basic leadership
procedures and tasks.As a result, Lijjat Papad may use environmental issues to adjust
financial, natural and social performance despite concerns towards the environment will
enhance the business image. Environmental sustainability within business goals and
strategy will also reflect corporate responsibility of the company. Environmental sustainability
in operations works towards improving the bottom line and overall profitability for the
business of Lijaat Papad.
2.1.6 Legal

Legal components can influence the company such as the instruments through which an
organization buys its stock or connects with the client. Labour law refers to the guidelines in
regulations that set up minimum and benchmark conditions which include identifying with the
work of people for example minimum working age, least time-based compensation, etc.Thus
the company should be mindful of these laws in routine business tasks, especially in the
hiring process. Under the discrimination law, Lijjat Papad should avoid episodes of unequal
for treatment based on an individual's age, inability, sex, national source, race, religion, and
sexual orientation. To adhere to this, the company should train its human resource
management team in ensuring that there is no inequality in hiring , discrimination in
recruitment, internal discrimination in talent management, bias in training opportunities,
unfair compensation systems and prejudiced promotions and succession management. The
company is required to give a protected work environment to its workers. Working
environment security and wellbeing laws build up guidelines intended to dispense with
individual wounds and injuries from happening in the work environment. Therefore all
operations of Lijjat Papad should be designed to physically and emotionally safeguard and
protect the employees and the labour force employed.

2.2 MICHEL PORTER’S FIVE FORCES MODEL

2.2.1Competitive Rivalry: Moderate but constantly increasing

It can be attributed to the fact that Lijjat papad is the pioneer in the field of papads and has
maintained market leader position for long years in India. It has turnover of 829 crores of
which 36 crore is from export revenue [1]. Currently other established food players has
jumped into papad industry to take market share of Lijjat papad. Following table shows
increasing market share of one such competitor. Highly fragmented industry as more and
more major players are entering.

2.2.2Threat of New Entrants: Low

Threat for new entrants is low as papad industry requires Economies of scale. Also for the
new entrant high investment is required in setting up manufacturing process, setting
distribution network and branding promotion campaign.
2.2.3Bargaining Power of Suppliers : Low

Lijjat papad have their own flour mills. They have to purchase just dal and other raw
materials from farmers. Due to highly fragmented market of supplier, they have very low
bargaining power.

2.2.4 Bargaining Power of Buyers : High

Papad market is perfectly competitive market. Also the customer demand is highly elastic.
Hence customer is highly sensitive to price. Customer is highly influenced by marketing
strategies. Customer loyalty fluctuates frequently.

2.2.5Threat from Substitutes: Moderate

The traditional practice of preparation of papad as a convenient food at household level is

still in practice in India. For e.g. a sample survey in Dharwad city with sample including retail
shops and mahila mandals revealed that 72% of the sample still relied on house hold
preparation. Various product such as nachos, mathiyas are gaining popularity among
children. They can act as a substitute of starter in Indian food.

2.3 INTERNAL ENVIRONMENT ANALYSIS

Leading organizations such as Lijjat Papad have obtained sustainable competitive

advantage and have had the option to achieve the strategic position.There can be different
sources of sustainable competitive advantage for Lijjat Papad. A firm can depend on
innovation to decrease its overall production costs and would then be able to pass this
advantage on to its clients.Papad can also concentrate on making a differentiated item or
administration to increase its overall share of the pie through generating considerable
sustainable competitive advantage utilizing these systems. This is done through means of
traditional as well as modern procedures embraced by Lijjat Papad .

2.3.1 Differentiation strategy

2.3.1.1 Organizational Leadership

Lijjat Papad has made use of the differentiation factor to maintain higher leadership and
differentiation from industry competition. Differentiation of effective leadership may be
achieved through different forms and basis.

2.3.1.2 Broad product portfolio

Furthermore, this differentiation can differ from one item to the next, from one market to the
next, and from one sector to the next. Quality, durability, usefulness, and, in a few cases,
consumer loyalty and brand image are the most important pillars of differentiation. Lijjat
Papad has set a completely different and engaging consumer experience by differentiating
its commodities and products based on quality.

2.3.1.3 Brand Image

Apart from that, it has established a distinct brand image, which serves as a point of
differentiation and encourages Lijjat Papad to advertise, promote, and sell its products and
brand better than the competition in both the domestic and foreign markets.

2.3.2 Focus strategy

2.3.2.1 Overall Quality of product and service

Quality and premium flavour are the cornerstones of Lijjat Papad's distinguishing strategy. It
only serves premium-quality products, allowing it to charge a top-notch and premium price. It
has taken the most extraordinary steps in terms of the nature of the raw resources it uses to
make its products. Lijjat Papad makes an outstanding effort at each stage to ensure that its
product meets the most stringent quality standards.

2.3.2.2 Value addition at each step of the value chain

The account of value, however, does not end with obtaining exceptional raw material quality.
It gets further away from there. The readiness is the source of a lot of contrast. Lijjat Papad
meticulously prepares its goods in order to maximize quality.

2.3.2.3 Management of human resources

The rest of the credit goes to Lijjat Papad's human resources and staff. The brand selects its
raw materials with care, only using them when they are in perfect shape. Before being
approved, products are evaluated three times from each cluster. This is how Lijjat Papad
achieves the high level of quality that each client expects and enjoys.

2.3.3.3 Cost-based leadership and differentiation

Porter's traditional methodologies are methods for creating and developing a sustainable
competitive advantage for Lijjat Papad, as it was, by constructing the "edge" that will place
the company in the perfect position and distinguish it from its competitors. Within a cost
leadership methodology, there are two key methods for accomplishing this: raising profits by
reducing expenses while charging consumers industry-average prices and charges.Since
Lijjat Papad has managed and lowered expenses, has increased his part of the whole
business by charging cheaper costs and making a reasonable profit on every trade. Lijjat
Papad is a pioneer in terms of cost in the industry and market where it works, as evidenced
by its cost-based strategy and methodology. Being one of the lowest-cost producers isn't
enough, as the corporation leaves itself vulnerable to aggressive attacks from other
producers and industry participants. These players may reduce Lijjat Papad's costs,
obstructing the company's efforts to increase its part of the overall market share.

2.3.3.3.1 Achieving cost differentiation

As a result, Lijjat Papad should be certain that it can achieve and maintain its leadership
position before embarking on a cost leadership plan. Lijjat Papad will be able to achieve cost
differentiation by having access to the funds required to invest in cost-saving innovation and
highly skilled coordination's. with a small effort base (work, materials, offices), and a
mechanism for lowering costs below those of rival competitors.

2.3.3.3.2 Achieving cost leadership

However, Lijjat Papad should consider for the possibility of competitors imitating its cost-
effectiveness strategy in order to reduce and control their own costs while also increasing
the overall share of the market for their products. As a result, it is critical that Lijjat Papad
does not rely on a single method of cost leadership but instead strives to improve. This can
be accomplished in a variety of ways, including engaging and applying the Japanese kaizen
technique, high efficiency, high limit use, use of dealing capacity to arrange the lowest costs
for generation inputs, lean production techniques (for example, JIT), effective creation
process, and effective dissemination channels.

2.3.3.3.3.Overall Cost Effectiveness through Cost Leadership and Cost Differentiation

Lijjat Papad's cost difference and leadership approach will be dependent on the details. The
cost effort aims to reduce expenses to the bare minimum in order to provide clients with
lower prices, allowing Lijjat Papad to save money. High specialised abilities and money
access are frequently associated with cost leadership strategy requirements. In addition, the
corporation should invest in innovation and ensure economies of scale.

RECOMMENDATIONS

This section will offer recommendations based on internal and external analysis done for
Lijjat Papad. These recommendations will help the company take strategic decisions that will
increase its core skills and capabilities while reducing its risk and threat exposure.

Strengthen distribution network

Control

This is a critical strategic proposal since it will provide the corporation more control over its
products in various markets. The corporation will have more control over where its products
are put, allowing it to improve product accessibility and availability.

Stronger relation with consumers

Simultaneously, the company's distribution network will be strengthened, allowing it to

engage more closely with end consumers by being able to reach them with the same high-
quality products in multiple markets.

Develop unique marketing tactics

Higher penetration

This strategy advice will assist the organization in reaching a larger number of customers
and penetrating deeper into target demographics. This technique will also allow the
organization to improve product trial, consumption, and sales.

Forming a partnership with consumers

New and informed strategic ways of communicating with consumers and engaging them with
the brand will be used in unique marketing approaches. Making consumers co-producers for
the brand is one approach to accomplish this. Another way Lijjat Papad can do this is
through co-branding with other similar but unrelated brands and companies in order to
increase market visibility among target consumers.

Adapt to different cultural aspects of different markets

Identify different consumer group characteristics

Each market and target group has its own personality. This suggestion is made so that the
organization can better interact with various target groups in various markets.

Adapt to and respond to characteristics

By adjusting to distinct cultural and geographical traits, the company will be able to better
offer itself to target consumers, who will feel a stronger connection for the product and be
more likely to use it.

Expand into new regions

Market expansion

Expansion into other regions and markets is another strategic advice for Lijjat Papad. To
begin, this might be accomplished by extending into new markets. The company will gain
exposure to new consumer segments as a result of this expansion. Diversify revenue
streams and increase total consumption rates. It will also provide regional and international
exposure for the company's expansion.

Product diversification

Diversification of products is another way to expand. The corporation will be able to enter
further into existing markets by investigating new consumer groups and target consumer
groups by offering new items. This will help diversify the company's revenue streams and
boost its overall market share.

Strengthen value network

The company will be able to preserve a competitive edge by further developing the value
network and adding quality and upgraded aspects at various stages, as well as deter new
players from entering the industry by raising entry barriers. This will enable the company to
maintain long-term competitiveness against other companies, as well as a potential
leadership position in local and worldwide markets and industries.