Swot analysis for consumer non-durables sector (FMCG)

By: Jeh Shah

Consumer nondurable goods are purchased for immediate or almost immediate consumption

and have a life span ranging from minutes to three years. Common examples of these are
food, beverages, clothing and shoes

The top 10 FMCG companies in India are:

1. HUL (Hindustan Unilever LTD)

2. ITC Ltd
3. Nestle India Ltd
4. Britannia Industries Ltd
5. Godrej Consumer Products Ltd
6. Patanjali Ayurveda Limited
7. Dabur India Ltd
8. Marico Ltd
9. Varun Beverages Ltd
10. GlaxoSmithKline Consumer Healthcare Ltd
 Strength Weakness

Low operational costs Low scope of investing in Research and

Presence of established distribution networks in
both urban and rural areas
Presence of well-known brands in FMCG sector
Deep roots in local sector and great
understanding of consumer needs
technology and achieving economies of scale.
Low levels of exports.
Many counterfeit products in the markets
specially in rural and semi urban markets.

SWOT ANALYSIS

Opportunities
Threats

Large domestic market with over 1.3 billion

people. removal of import restrictions resulting in
Good export potential.
replacement of domestic brands
Untapped large rural market. slowdown in rural demand
Rising income levels and increase in purchasing tax structure
power.
high consumer goods spending

Porters Five Force Model

Bargaining Power of Suppliers (Low)

 Big FMCG companies are able to dictate the prices through local sourcing from a fragmented group
of key commodity suppliers

Bargaining Power of Buyers (High)

 Low switching cost induces the customers’ product shift
 Influence of marketing strategies
 Availability of same or similar alternatives

Threats of substitutes (High)

 Presence of multiple brands
 Narrow product differentiation under many brands
 Price war

Threats of New enterants (Medium)

 Huge investments in setting up distribution network and promoting brands
 Spending on advertisements is aggressive
Competitive rivalry (High)
 Private label brands by retailers are priced at a discount to mainframe brands limits competition for
the weak brands
 Highly fragmented industry as more MNCs are entering