Fi rm & Po r t f o l i o

Analysis
Strategic
Management
 Origin

1897 GROUP
Ardeshir Godrej &
Pirojsha Burjorji Godrej
Employees

28,000+
Global Presence

13+
Countries
Market Capitalization

590 Bn INR
 Important Milestones
Agrovet turns profitable, Divested
Aadhaar, Chicken Business and
Nature’s Basket;

4.1 2008 -
Billion Godrej Consumer Products formed; Godrej
Soaps renamed to Godrej Industries; a JV
with Hershey company; launched Nature’s
Basket

2000s
Godrej Agrovet in 1971 & Godrej
Properties in 1988
Late Godrej Soaps Limited was incorporated;
Acquisition of Transelektra Chavi bar – a soap made entirely from
Domestic Products (Hit and 1990s vegetable oil; marked as entry into FMCG
GoodKnight)

1918

1897
Godrej & Boyce Mfg. established with
first lock and then safe in 1902
• Established 1990, first real estate company to have ISO certification

• Commitment to environment sustainability evident through LEED ratings and conformance to

GRESB and GRIHA

• Public listing in 2010

• Conservative and steady expansion strategy and strong brand equity

• business model based on non-capital intensive strategy

• “no land bank strategy” & joint development model (profit sharing with land owners)

• Highest gains among peers suffering from cash starvation after IL&FS crisis and inventory pile
up after RERA act.
BUSINESS STRATEGY
 BCG MATRIX TIMELINE

2015 2020 2025(E)

Question
Cash Cow Star
Mark

  2015 2020 2025 (estimate)

Market growth rate(%) 9.6 7.8 9.4

Relative market share(%) 11.2 16.1 19.2

 Top 10 Brands Portfolio
CAGR 70% Revenue 75% comprises of
4.72% Contribution Category Leaders

Revenue: INR 10,314 Cr

13 Indonesia Africa,USA & Middle East
India
1928
; 1.8
4.1 5.6
13 20.7 5.8
Household insecticides Soaps 1928 32
%
1.2
Hair Colour Air Care
16.8
Personal care Hair care

29.2 82.8
Others
 How GCPL has created value for its
Shareholders?
Financial Capital
Equity, profits reinvested,
investments in assets &
brands
Manufactured Capital
• Dispersed manufacturing
clusters
• Global and local R&D
centers.
Intellectual Capital
• Strong legacy of the Godrej Group
• Strong portfolio of brands
• Investment in R&D
• Develop innovative products
• Unique consumer insights though
advanced predictive analytics
• Digital command center
3x3 Approach Financial Capital
Multi-local • Comparable consolidated
Approach revenue growth of 7%
Strategic Pillars • Comparable consolidated
net profit increase of 40%
Manufactured Capital
Strategic India obsolescence reduced
to 0.06%
Inputs Output
Intellectual Capital
Process • New products launched in India in
the last 5 years contribute to over
• Extending leadership in core categories and geographies 20% of sales
• Accelerating innovation and building purposeful brands • Innovation rates in India and
• Leveraging digital Indonesia are 30% and 50% higher,
• Enhancing go-to-market respectively, than the previous year
• Working to make the supply chain best in class • 53% increase in digital reach
• Fostering an inclusive, agile and high-performance culture
 (Contd.)
Human Capital
• Skilled manpower across functions
• Investment in training and development
• Prioritizing safety
• Fostering diversity & inclusion
Social & Relationship Capital
• Consumer engagement models
• Partnerships with suppliers,
retailers, distributors and
wholesalers
• Investment in CSR and
community engagement
initiatives
Natural Capital
• Sourcing and investment in
renewable and non-renewable
raw materials
• •
Investments in green initiatives
Human Capital
• Consistently rank high on best places to
work and internal engagement surveys
• 26% women workforce; 19% women in
3x3 Approach
leadership
Multi-local
Approach
Strategic Pillars
Social & Relationship Capital
• Reached 1.3 million outlets in
Strategic India through direct distribution
• 305,101 young people trained
Inputs Output across India and Kenya since FY13
Process
Natural Capital
• Extending leadership in core categories and geographies • 457 MT hazardous waste
• Accelerating innovation and building purposeful brands • 99.7% reduction in waste
• Leveraging digital generated/ton production
Enhancing go-to-market • 10,000 MT waste/annum diverted
• Working to make the supply chain best in class from landfill from community
• Fostering an inclusive, agile and high-performance culture projects in India
Industry CAGR Company CAGR
10% 16%

1991 1992 2017

Industry Size Company Market Cap
$198 B $1.068 B Incorporated Deemed Public Listed

Animal feed revenue share is 52.1% in 2019 and

has been increasing at a CAGR of 6.2% from 2016-
2019

Strategies
• Inorganic growth/acquisition
• Cost leadership by improving operational
efficiency to increase market share in largely
unorganized sector
• R&D
● Godrej Agrovet at initial stage did not have inorganic approach. It started to build all the business
itself. But things did not pan out as expected.
● Lack of domain expertise proved out to be a big hindrance in growth. It started a retail chain for
rural area known as Aadhaar. Also chicken processed food known as Godrej-Tyson food was
completely owned by Godrej.
● Acknowledgement of this problem by Nisaba Godrej led to change in leadership. Balaram Yadav,
head of chicken business was made MD in Agrovet. Also there was change in strategy leadership.
This all took in 2007-2008. Agrovet gave 70% stake of Aadhar to Future group later on it completely
divested from business. Also In the same year it gave 51% stake to Tyson foods. It also handed over
Natures basket to Godrej Industries. It was in this year Agrovet became profitable by 2008-2009.
● Thereafter all the new domain ventures of Agrovet have been inorganic where it is initially minority
stake holder and after understanding lucrativeness of business the stake in business is increased
and they become majority stake holder. They have acquired business like Maximilk, creamline dairy
and Astec Lifesciences(pesticides).
 Why GE/ McKinsey Matrix?
GE/McKinsey Matrix BCG Matrix

9 Grids 4 Grids

Market Attractiveness & Business Attractiveness –

Only two factors – Market Growth and Market Share
Allows for multiple parameters

Has three degrees of measure – green for go or Has only two degrees – high and low
expand, yellow for caution and red for stop or divest
Parameters & Weights
Parameters & Weights

Microsoft
Excel Worksheet
GE/McKinsey Matrix
 Conclusion

• Godrej group has developed a strong social and financial capital base in last 120
years of operation. It has been observed that Godrej group tried to develop all
capability in house and failed many times. Its approach should be JV as they did
in agrovet companies , trying to learn business expertise and if the business
seems lucrative completely acquire the company.
• Management has been properly using the free cash flows to expand the business
operations and has been supporting the other business of organisation. It was
observed that Godrej chemical was funding Godrej nature basket but the
investment wasn’t worthwhile. It was sunk cost fallacy the company had fallen
prey to.