Godrej Consumer Products Ltd.

Major Sources Of Revenue

GCPL, today, has a strong presence in the FMCG industry across three core categories:

 Personal care
 Home care
 Hair care
With focus on three geographies - Asia, Africa and Latin America. GCPL’s inorganic expansion over
the past decade plus in Asia, Africa, the US and Latin America has enabled it to enjoy a diversified
revenue profile, with international operations driving 46% of its consolidated revenue in FY21.

This expansion has helped the company in extracting synergies in terms of product cross-pollination
and stronger distribution network, besides being able to diversify its product portfolio and
geographical reach.

The company has moved from an over 50% soaps portfolio in 2009 to a more balanced and strategic
category portfolio. Today, GCPL has three core categories: household insecticides, personal wash,
and hair care. It is a leading global player serving the hair care needs of African women. Air care,
which it forayed into a few years ago in India, which has now become the fourth global category for
them.

Also, at a consolidated level, in FY21 GCPL derived:

 31% of its revenue from the hair care segment

 30% from the household insecticides (HI) segment
 20% from personal care segment
 6% from the hair care segment

Share of revenue
13%

6% 31%

20%

30%

Hair care Household Insectivides Personal Care

Air Care Other
Its brands such as Goodknight and Hit in home care, Godrej Expert in the hair colouring segment and
Cinthol and Godrej No 1 in the personal care segment enjoy market leading positions in the domestic
market.

Similarly, in international markets, its brands Darling in the dry hair care segment in Africa and Mitu
wet wipes and Stella air fresheners in Indonesia enjoy established market positions in their
respective regions.

In fiscal year 2008-09, 22% of GCPLs overall revenues came from international businesses. In fiscal
year 2020-21, it is 44%.

Geography Salience
5%

23%

56%

16%

India Indonesia
Africa,USA & Middle East Others

GCPL has a consistent track record of introducing new products to cater to shifting consumer
preferences and expects that, going forward, its revenue growth will be driven by stable demand
growth and introduction of new products across geographies. Supported by its portfolio of strong
brands, constant innovation, and brand repositioning, the company has managed to maintain its
competitive position in these key product categories and geographies. It will continue to benefit
from its established position in domestic and international FMCG markets
Risk Factors For The Company:

For a company as large and widespread as GCPL, the emergence of fast-evolving digital technologies,
increased regulatory pressure, and global economic uncertainties are key factors in the landscape of
current risks.

The company prioritises risks related to increase in operational costs, occupational health & safety,
and environmental protection among others. On a case-to-case basis, It also address the
macroeconomic factors, including economic and political developments and natural calamities that
affect the industrial sector generally. Other risks such as legislative changes resulting in a change in
taxes, duties, and levies, whether local or central, that impact business performance and relative
competitiveness of the businesses are also majorly focused on.

Expanding the market reach will eventually also result in exposing the company to an increasing
degree of risk due to climate change, which can impact their operational performance, financial
performance, and overall sustainability.

The Board level risk management committee is in place under the chairmanship of an independent
director. The role of this committee is to identify potential risks and develop mitigation strategies.
The Board and Senior Management keep an eagle-eye view on business activities to identify
probable risks that might arise and are actively involved in developing strategies to mitigate them.
Additionally, the company has procedures in place for guidance in risk management and to conduct
regular trainings on Enterprise Risk Management to create awareness in the organisation as a whole.
It provides insights into risk definition, risk identification, risk rating, risk classification, risk
prioritisation, risk mitigation, control, and review during these training sessions.

Business Risks:

Some of the major business risks GCPL faces are as follows:

 Competition from retailers through their private label offerings and extended promotional
activity
 Expanding international operations leading to various regulatory, economic and political
risks
 Operational risk resulting from disruption by labour unions, strikes, and work stoppages
 E-commerce, emerging as a new distribution channel, may increase fraud risks in supply
chain (in areas such as counterfeiting)
 Outsourcing risk with increasing reliance on third parties for key business functions such as
manufacturing, sales, and R&D
 Risks associated with product liability, and recalls, resulting in legal proceeding and
tarnishing brand name
 Reliance on the performance of certain flagship products
 Increasing consumer activism through social media may hamper brand positioning and
reputation, thereby driving the sales down
 Risks related to the infringement of intellectual property rights as a company may be unable
to protect current and future brands and products Increased product safety and quality
concerns owing to the artificiality of ingredients and, contamination and deficiency in
products
  Major upheavals, such as loss of facilities, diseases, strikes, and other natural disasters,
which can affect national as well as international operations
Addressing business risks

GCPL responds to the instability that it encounters in the global markets, the sluggish growth rates,
and market fluctuations, through judicious cost-control and commodity tailwinds. It launched new
products such as, Godrej No. 1 Germ Protection soap, and a natural platform under the range of
products in Goodknight to name a few. The company backed its efforts by competitive media
investments, consumer engagement initiatives, activation programmes, and communication
campaigns to drive growth.

In certain markets, they also adopted practices such as lower contractual advertisement and
promotion spends. Other market specific strategies include launch of cost saving projects, such as
Project Symphony in Chile. Their go-to-market approach has been resilient and dynamic, and they
are driving growth across all our businesses. Furthermore, they ensure that none of the products
they sell are banned in the markets that they cater to. Their efforts were driven towards increase
market penetration in emerging markets through innovative launches, awareness campaigns, and
activations driven by robust margin expansion and improving consumer demand in rural India.

Along with business risks, here are some of the sustainability risks the company faces as a consumer
goods manufacturer and their approach to address them.

Supply chain risks

With a vast and extensive supply network comes the additional responsibility of ensuring every
member of the value chain is carrying out business activities in the most efficient manner possible. It
becomes imperative for the company to evaluate and select their suppliers keeping in mind their
environmental performance among others because failure to do so may result in adverse effects.

Addressing supply chain risks

The Supplier Risk Assessment helps to identify and mitigate risks that could come up along their
value chain. Critical suppliers are segregated based on their monopoly as well as those that could
have a huge impact on our overall business. They carry out their own assessments as well as employ
the services of a third party to assess their quality, economic, social, and environmental
performance. The key risks identified are then mitigated through various approaches.

The company also builds the competency of suppliers through their training and capacity building
programmes. As a method of motivating and means of positive reinforcement, they recognise and
award their suppliers and distributors that demonstrate exemplary performance. They have also
developed a Sustainable Procurement Policy that includes recognised international standards and is
applicable to all their suppliers. They are working closely with their suppliers to monitor and better
their sustainability performance.

Environmental performance

With a call to action by major nations and Governments alike to reduce the impact of industries on
the environment, GCPL must run their operations in the most efficient manner either by improving
processes or by employing newer and cleaner technologies. The costs associated with non-
compliance and side-stepping local laws and regulations carry significant monetary fines as well as
reputational damage.
Addressing environmental risks

The company focuses on energy and water conservation, GHG mitigation, waste minimisation, and
use of renewable energy to tackle climate change. They have a dedicated environmental
sustainability team, and they are dedicated to studying and identifying risks and opportunities for
our manufacturing facilities spread across the globe. After identifying risks and opportunities, the
team proposes necessary action to be taken. This has been working successfully, and several
measures proposed by the team have been implemented and yielded excellent benefits.

Natural resources

Dependence on natural resources is a long-term economic threat as well as a threat to the

environment considering their limited availability. There is an additional pressure to source raw
materials from suppliers who meet sustainable agriculture and environmental guidelines. Water
management is another similar issue that affects not only the rate of growth of production, but also
the local communities in which GCPL operates.

Addressing natural resources challenges

As a part of their efforts to sustainably source natural resources, the company strongly promotes
and develop materials that are not energy and water intensive and opt for materials that emit lesser
GHGs. They are progressing towards looking at their value chain in a cyclical manner by focusing on
lifecycle costs and preferring 100% recyclable and renewable alternatives. The company understands
the problems caused by shortage of water and have invested in an integrated watershed
development project in the drought prone region of Siddepet district, Telengana, India, to help
restore the ecological balance of the region.

Community unrest

Being a resource-heavy industry, GCPL must be especially aware of their consumption and
production patterns keeping in mind the communities that work around their factories. Their
business activities must not come in the way of the communities ability to live a healthy life. Failure
to do so may result in agitations and unrest, along with regulatory sanctions.

Addressing community unrest

To better understand their community stakeholders, GCPL carries out a detailed community needs
assessment at their plant locations. They work closely with the community members to understand
their priorities and work towards the overall development of the region where we operate in. As a
result, the company has streamlined their development activities and run a number of community
initiatives to address the immediate needs of the communities they operate in across their locations
in India. GCPL primarily invests in education, water, sanitation and skill building initiatives in villages
in and around their manufacturing facilities.
SWOT Analysis

Godrej has created a strong brand identity and visibility with the help of proper marketing. In today’s
corporate world marketing is an effective tool that can change the picture of a brand.

Strengths of Godrej Consumer Products Limited

 Strong Brand Portfolio: GCPL is the topmost leading company with a broad company
portfolio in the FMCG industry
 Loyal Customer Base: Godrej Consumer Products has a strong market position in the market
with the products like soaps, hair color, hand sanitizers as well. There are 100 customer
trusted products in the market. The Godrej Company can make a presence in customers. as
they have their customer presence in 60 countries
 Innovation: The GCPL is a very innovative company and always search for a broad portfolio
by spreading the globally
 Strong Reach: The Godrej consumer products limited company has a big geographical reach
all over the world, has a quality consumer base, conserve and maintain a strong brand
identity in every place
Weaknesses of Godrej Consumer Products Limited

 Low Market Share: The weakness of Godrej consumer product company is lack of market
share and scale because the competitors of the GCPL have strong finance to diverse to
different sectors easily.
 Heavy Competition: Godrej Consumer Products has excessive competition from huge
private players and other international brands.
 Limitation on Expansion: The Godrej consumer company business has experienced a leave
of financial and technical capital, which the company has limited its capability to expand its
service domestically location and worldwide era.
Opportunities of Godrej Consumer Products Limited

 Multi-dimensional: The Godrej Consumer Products Limited company is a multidimensional

company as they have a presence in over 60 countries. They have inorganic expansion.
 Technology: The ruler market is expanding fast because of technology as the Godrej
Consumer Products company can maintain and supply the products to the ruler; it gets
capitalized hence the company can improve its bottom line of marketing.
 Increasing Demand: As the lifestyle of the people increases, there would be a change in
demand for the products, hence the increase in the demand for the product is the increase
of purchasing rate.
 Expansion Opportunity: Godrej consumer company business has the window of opportunity
of expanding demand for amusement parks in the United States of America by getting into
the U.S entertainment industries.

Threats of the Godrej Consumer Products Limited

High Competition: The Godrej Consumer products company faces consequential competition from
the worldwide era and domestic rivals in supplementary to quickly changing the pattern of show
business and also the consumer preferences. by these factors, the company has the chance to lose
the brand identity of the company and also the position of ley player.

Regulations: The business can also be reduced by FDI in retail for the GCPL company.

Sector Unorganized Competition: The competition of unbranded and local brands is also a major
threat that reduces the margin, for the Godrej Products.

Rivalry: The Godrej consumer company business fights with an increased danger of having a chance
of to make duplication of the company products and duplication of company model by numerous
rivals. The business model has its core of strengths of the business and has the main reason for the
company’s success.

Conclusion

Godrej has needed to give more attention to all the major players to survive in the practical market
because the company’s from worldwide are playing the best role in the market also most of the
companies are providing goods at the least prices and best values to the customers.

As the days go on the market condition also changes like a test, reference, a trend which take
changes regularly, for that company should need to acquire best (topmost) technology to attain
more market share in the present as well as in future. The company needs to adapt to trends and
increase its reach by using digital channels and digital marketing.