SWOT ANALYSIS OF MARICO INDIA LTDSUBMITTED TO: SUBMITTED BYPROF. NIHIT JAISWAL AARTI BHAWSAR MBA 3rdSEM SEC. P
DEFINITION OF THE BUSINESS & COMPANY The company was founded in 1857 By Kanji Morarji and is headquartered in Mumbai ,India. Marico Limited, together with its various consumer goods and services in India, the Middle East, Asian countries, Egypt, and the United States. The company provides coconut oils, edible oils, hair oils and other hair care products, fabric care products, processed foods, soaps, and baby care products, as well as skin care and ayurvedic products.
VISSION & MISSION Consumers: For they are the reason we exist Membership: For a sense of ownership empowers us. Excellence: For it unleashes our potential Wealth: For on it hinges our growth Innovation: For it gives wings to ideas MISSION 2020 The Marico Innovation Foundation’s mission is to provide the nation with first: a belief that Innovation is possible and is the way to leapfrog India into the center stage of global business leadership, and second: a framework to leverage innovation for quantum growth.
Goals & Objective : wish to achieve by 2010 Company commit itself to improving the quality of peoples lives in several parts of the world, through branded Beauty & Companyl products and solutions. Company shall offer brands that enhance the appeal and nourishment of hair and skin through distinctive products and services based on the goodness of coconut, other natural substances . Company shall make available brands that contribute to healthy living, through, both products drawn from agriculture offered in natural or processed forms, and services. Company shall develop, in parts of the world beyond the Indian Subcontinent, a franchise for the branded products and services. Company shall aim to be a leader in each of its businesses through heightened sensitivity to consumer needs, setting up of new ideas. Company shall share prosperity amongst members, shareholders and associates, who contribute in improving equity and market value. Company shall acquire the status of a friendly corporate citizen, contributing to the betterment of neighborhood communities,where Company are significantly present.
SHAREHOLDER NO OF SHARES %Arisaig Partners (Asia) Pte. 35,353,269 5.8LtdT Rowe Price International 22,040,548 3.62Inc.The Royal Bank Of Scotland 19,092,286 3.13HDFC Trustee Company 13,840,500 2.27Azim Hasham Premji 11,589,417 1.9Franklin Templeton Mutual 10,078,146 1.65FundAcacia Institutional Partners 9,949,389 1.63Morgan Stanley Investment 6,704,116 1.1ManagementFranklin Templeton 6,615,163 1.09Investment Funds
Bankers Axis Bank Ltd Citibank HDFC Bank Ltd HSBC ICICI Bank Ltd Kotak Mahindra Bank Ltd Standard Chartered Bank State Bank of India
PRODUCT-MIXBRANDS TARGETED CUSTOMERS PARACHUTE •Primary Target Women Of All Ages PARACHUTE ADVANCED •Young Girls (College & School Going) HAIR & CARE •Appealing To Both Men & Women of All Ages •Primary User the Young Age Group SHANTI AMLA •Customer Looking for Value for Money (H.OIL+Badam) SILK & SHINE •Primary Target Female Of age 18 – 34 AFTER SHOWER •Primary Target Young Males 18 – 34 MEDIKER •Young Children Age Group 3-13 (Due to Lice Problem) SWEEKAR •Primary Target Housewives (Due to Economic+Healthy Life for Family) SAFFOLA •All Health Conscious Consumers (Specially for Heart Patients) REVIVE •Housewives of Urban Area (Higher & Middle Class).
MARICO BRAND PORTFOLIO HAIR OIL HAIR CARE EDIBLE OIL OTHER CATEGORY CATEGORY CATEGORY PRODUCTS HAIR & SHANTIPARACHUTE CARE AMLA SIL JAM KAYA REVIVE AFTER MEDIKER SKIN SILK & SHOWER SHINE SAFFOLA SWEEKAR OIL
TOP MANAGEMENT Name-Designation Mr. Milind Sarwate : Cheif - HR and Strategy Mr. Rakesh Pandey : Chief Executive Officer - Kaya Mr. Vilas Shirhatti : Chief - Technology Mr. Saugata Gupta : CEO - Consumer Products Mr. Vijay Subramaniam:Chief Executive Officer - International Business Mr. Vinod Kamath : Chief - Finance and IT andCompl. Officer
COMPITITORS Amar Remedies Ltd. J L Morison (India) Ltd. Ador Multiproducts Ltd. JHS Svendgaard Laboratories Bajaj Corp Ltd. Ltd. Colgate-Palmolive (India) Ltd. Jyothy Laboratories Ltd. Dabur India Ltd. Jyoti Cosmetics (Exim) Ltd. Emami Ltd. My Fair Lady Ltd. Farmax India Ltd. Paramount Cosmetics (I) Ltd. Fem Care Pharma Ltd. Procter & Gamble Hygiene & Gillette India Ltd. Healthcare Ltd. RayBan Sun Optics India Ltd. GKB Ophthalmics Ltd. Velvette International Pharma Godrej Consumer Products Ltd. Products Ltd. Godrej Industries Ltd. Hindustan Unilever Ltd.
JOINT VENTURE 1.Marico Buys JV Partner’s Stakes(23 per cent stake) ;2003 2.ADANI (50:50 joint venture) 3.It acquires Oriental Extractions-Manjal from Oriental Extractions Pvt Ltd; Jan 03, 2006 4.It acquires Hindustan Lever Ltd-Nihar from Unilever ;Jan 27, 2006 5.It acquires Sundari a manufacturer of skin care products (7.5 per cent stake in Sundari) 6.It acquires Oil of Malabar from West Coast India; Nov 01, 1999 acquired the aesthetics business, of the Singapore based Derma Rx Asia Pacific Pte. Ltd. (Derma Rx), under the Kaya portfolio
Operating Profit Margin(%) = EBIT/sales*100year calculation Total2010 320.58/2001.50 16.012009 254.70/1921.85 13.252008 196.18/1568.78 12.502007 193.35/1371.66 14.092006 139.10/1044.91 13.31 Interpretation: companys revenue is left over after paying for variable costs of production such as wages, raw materials, etc. In the 2010 the Operating Profit Margin is 16.01% which is the highest in the last 5 years so that the Company will to be able to pay for its fixed costs, such as interest on debt.
Gross Profit Margin(%)=Gross Profit/sales*100year calculation Total2010 317.78/2001.50 15.642009 235.92/1921.85 12.272008 190.96/1568.78 12.172007 185.98/1371.66 13.552006 142.20/1044.91 13.60 Interpretation: In the 2010 the Gross Profit Margin is 15.64 % which is the highest in the last 5 years so that the Gross profit margin will to be able to pay additional expenses and future savings.
Net Profit Margin(%) = Net Profit After Tax/Sales*100year calculation Total2010 235.02/2001.50 11.572009 142.12/1921.85 7.392008 143.42/1568.78 9.142007 122.36/1371.66 8.922006 101.14/1044.91 9.67 Interpretation: Net profit margin will to be able to pay the operational expenses .In 2010 the company is more able to pay the interest, tax, dividends and so on.rather than previous years.
EPS = Net Profit After Tax*Preference Dividend/no. of equity share year calculation Total 2010 235.02/60.93 3.86 2009 142.12/60.90 2.33 2008 143.42/60.90 2.36 2007 122.36*1.65/60.90 2.01 2006 101.14/58 1.74Interpretation: Earnings per share serves as an indicator of a companys profitability. There isconsistence increase in EPS. No. of equity shares are stable in 2007, 2008 and 2010and not much diffrence in 2009 and 2010 so it shows that the policies of thedirector of the company is yery good.
Return on Net Worth(%) = EBIT/Total Net Worth*100year calculation Total2010 320.58/571.66 56.072009 254.70/367.68 69.272008 196.18/280.23 70.062007 193.35/183.49 105.372006 139.10/277.36 50.15Interpretation:There is decrement in Return on Net Worth from 2007 to 2010 continously so profit ofthe company generates with the money which shareholders have invested isdecreasing. Return on Net Worth measures a corporations profitability .
Dividend on Pay Out Ratio = DPS/EPSyear calculation Total2010 0.66/3.86 0.172009 0.66/2.33 0.282008 0.66/2.36 0.272007 0.66/2.01 0.322006 6.20/1.74 3.56 Interpretation: The Dividend on Pay Out Ratios are decreasing because now policy is that the company is reinvesting the profit in the firms activity rather than as a cash payout to shareholders
1.STAR It is represented a product having high relative market share and high market growth rate. It need capital over and above its cash flow to maintain it’s market share. It provides cash for growing stars. It suggested Expansion Strategy for STAR .. E.G. KAYA SKIN CARE AND PERACHUTS COCONUT OIL IN MARICO AND IN THE INDUSTRY HLL AND GODREJ COMES IN THIS CATEGORIES.
2.QUESTION MARK ??? It represented by a Product having low relative market share and high market growth rate I.E low market share in a growing market. It requires large cash due to market growth, but generates less cash due to low market share.It requires additional investment to increase it’s competitive advantage. E.G NIHAR, SAFFOLA AND IN THE WHOLE INDUSTRY DABUR COMES IN IT. These product company given more advertisement. Because these product not more popular in the market. So company given more cash to these product.
3.CASH COW It represent by a Product having high relative market share and low market growth rate. It is not attractive in long ran due to less market growth rate. E.G SAFFOLA (EDIBLE OIL), SILK N SHINE competitor -FORCHUN OIL , DHARA OIL etc. To meet the investment need of stars on question marks, over heads and growth strategy is suggested.
4.DOG It represents a product having low relative market share and low market growth rate. It has very low competitive position due to high costs, poor quality, poor marketing etc.It also has low growth potential due to low market growth rate. The preferred strategy is retrenchment. EX. MAHA THANDA Copititor-navaratn cool
AWARDSMarico has also won various other Awards, such as the following: Marico won 4 Awards for excellence in Employer branding & Advertising to Talent at the Remmy Awards 2009 . Saffola won Media Abby Gold for the World Heart Day Radio entry - " Radio goes silent" at the Goa Fest 2009 . Marico was awarded the IMC Ramkrishna Bajaj National Quality Award in Manufacturing Category by the Indian Merchants Chamber . Parachute won the Asia Star Award for the Parachute bottle warmer awarded by Asia packaging Federation . Parachute ranked 6th Most Trusted Brand in Bangladesh by The Bangladesh brand forum - an affiliate of the Global Brand Forum, Singapore in 2008 . Parachute won the Outstanding Marketing Achievement A w a r d - S ilv e r in 20 0 8.
STRUCTUREA Flat Structure : Marico has a flat organizational structure, with just five levels between the Managing Director and the shop floor operator. At Marico, everyone is a member and not an employee. As a member, each individual is empowered..Profit Centers: This division manufactures & markets Maricos 10 leading consumer product brands like Parachute, Saffola, Kaya Skin Clinics under the banner of Kaya Skin Care Ltd. All the above profit centers have their dedicated marketing teams, distribution channels, sales force.
Finance: The company is strongly supported by the Finance Division, which handles the legal, treasury, tax, control systems and management information support.HR: Equal support comes from HRD team, which expends its energies, formulating and building strategies to build a stable and high - talent organisation.
Domestic Business Category Market share range %BrandsParachute, Oil Of Coconut Oil 55Malabar, NiharHair Oil (Hair & Care, Hair Oils 22Parachute Jasmine, HairOils 22Parachute Advansed,Shanti Badam Amla,Nihar)Saffola Refined Safflower oil 98Mediker Anti-lice Treatment 90Revive Instant fabric starch 80
Strength FINANCE Centralized payment Decentralized collection Low invest Source of funds Management of funds 2009-10, the company generated a Turnover of about Rs.26.6 billion (USD 600 Million) In 2008-09 13.6 billion (about 380 million) 15%profits-over last 5 years 30%* market share (640 billion)
Marketing widespread distribution network of more than 2.5 Million outlets in India and overseas. innovative approach :focused on meeting the emerging needs of the modern day consumers Wide variety of product Understanding of Indian consumer behavior in the hair oil segment Large distribution network all over India.Rural market reach one of the largest amongst Indian FMCG company. Marico reach approximately 130 Million consumers in about 23 Million households No. 2 player in the growing VACNO (Value Added Coconut Oil)
Strong brand equity Wide global presence High bargaining power Diversification of business by expansion
Operation Plant location as per raw materials availability Low cost operations Absorb imported technology R & D system is so good MIS system of operation and control system Plant location Production system Operation and control system Strong in inventory control (28 days) In house production –no outsourcing-high reliability supplierssuperior quality assurance. India and foreign production location-spread benefit.
Cntd. Use JIT (just in time) approach for handling of raw material Known for their which reliability which comes from efficient operations
HR a flat organizational structure empowered : everyone is a member and not an employee Marico’s structure is dynamic & constantly Good personnel system Good industrial relation with other company Personnel system Organisational and employee characteristics Industrial relations Quality and motivation of personnel rated as one of the most innovative companies by Business Today -Monitor Group
Weakness FINANCE Fixed price Sales of Rural Area was Slowly Decreasing.Marketing Not strong within the shampoo segment, having hardly any share Not having any antidandruff hair oil whose market potential is worth 25% of the total oil market in India. Low company image Low promotion Low export level
Contd… Operation High cost of branded products HR High dependence on Parachute High leverage compared to peers Indian labour laws are relatively unfavorable to the trades and there is an urgent need for labour reforms in India
OpportunityFinance Indias Rs.460 billion FMCG market Increase Income Level With Result in Faster Revenue Growth.Marketing Need to concentrate within the various others market potential zones like hair shampoo, hair colorants etc. Large Domestic Market Growth Marico, is betting big on its international business and is open to acquisitions provided they fit in with its overall growth strategy . Growth in international markets Successful entry into beauty and healthcare market Untapped rural market In rural markets, brands are non-existent
Operation Constant innovation access international technology Huge Distribution Network :including 2 million in 3,160 towns and four million in 627,000 villages. Low education level. Foreign countries emerging as a leading buyer of the products Expand geographical presence Less developed infrastructure. HR India is rich in highly trained manpower Industry has large and diversified segments that provide wide variety of products Population
ThreatsFinance Marico’s debt-to-equity ratio for FY 2008 was 1.1, which is the highest among the FMCG companies. Any further large acquisitions financed by increasing leverage. Tax and Regulatory structure Economic slowdown resulting in lower consumer spending Currency risk: Marico derives approximately 20% of its revenues from international markets.Marketing Maricos key raw materials include copra, kardi oil, sunflower oil, corn oil and rice bran oil, which are commodity crops whose availability isseasonal. Competition from the diverse players present in the market can cause loss of market share. Intense competition from global brands in international market
Operation High cost of Land Environmental regulations Infrastructural bottlenecks in terms of power, utility, road transport etc Inadequate transport Geographical Disadvantages Retailers are becoming stronger and are wielding more power over manufacturersHR More job opportunities for the Human Resources around the world International labor Laws Despite technological advances, beverage sector remain labour- intensive Labor problems Any change in Government policy
Benchmarking Strategic BenchmarkingProcter & Gamble Hygiene & Healthcare Ltd is the benchmark for the in strategic benchmarking. Competitive BenchmarkingHUL is the benchmark for the M&M in Competitive benchmarking Process Benchmarking HUL External Benchmarking Marico’s shares on Wednesday closed at Rs112.25 on the Bombay Stock Exchange, down 0.22%. Dabur closed 1.19% higher at Rs180. The benchmark Sensex closed 1.76% lower at 17,380.08 points Internal BenchmarkingMarico is setting the example to others for his Internal benchmarking.
PLC MODEL OF MARICO INDIA LTD. KAYA SKIN SAFFOLANIHAR, SIL CARE AND (EDIBLE MAHAJAM PERACHUTS OIL), SILK N THANDA COCONUT SHINE
Stage CharacteristicsMarket introduction stage slow sales volumes to start demand has to be created makes no money at this stageGrowth stage costs reduced due to economies of scale sales volume increases significantly public awareness increases competition begins to increase with a few new players in establishing market The preferred strategy is growth
Contd…Maturity stage The preferred strategy is stability or modest growth sales volume peaks and market saturation is reached increase in competitors entering the market.(fortune, dhara) brand differentiation and feature diversification is emphasized to maintain or increase market shareSaturation and decline stage sales volume decline or stabilize prices, profitability diminish profit becomes more a challenge of production/distribution efficiency than increased sales
STRATEGIESCORPORATE LEVEL STRATEGIES Emphasis on providing value goods to consumers, Joint venture and acquisition with players like Hll, adani & sundari. Sustained expansion in capacity to meet the growing demand of Edible oil in India. Diversify geographic footprint, and enhance scale and reach of operations.
BUSINESS LEVEL STRATEGIES Early entry in business Accurate demand forecasting High capacity utilization Price based compition is so serve that cost becomes an important factor. Company make product for skin is Kaya Skin Care these is so nuch differentiation to other.Night cream is PARASHUTE NIGHT REPAIR CREME
FUNCTIONAL LEVEL STRATEGIES widespread distribution network. Strategy of PARASHUTE product on popular and premium range products.
Suggestion Marico is the leading industry in FMCG sector in edible oil,beauty n health care segment in India but can also target other segments. Pay attion towards R & D. Adopt the eapansion strategy. Increase the Export. Increase the brand image Shanti Amla & Nihar Promotion Policy
Conclusion Company Marico has strong and long term association with the retailers in rural areas . Parachute is the most satisfied Brand/product, followed by Saffola, Silk & Shine Hair & Care, and Sweekar Edible Oil & after Shower Gel.