Godrej Consumer Products Ltd is an Indian consumer goods company and part of the Godrej Group. It has a presence across India, Asia, Africa, and South America. The company focuses on hair colour, household insecticides, and personal wash products. It has strengthened its core brands and leading market positions through innovations, packaging changes, and offering premium products at affordable prices. Godrej has also grown internationally through acquisitions. It aims to leverage its strengths across multiple regions through a focused 3x3 strategy targeting three categories in three geographies.
2. AGENDA
• Business overview
Godrej Consumer Products Limited
Ministering to the masses
Packaging innovations
Direct To Trade
Strengthening Core Business
Supply Chain Management
Conclusion
3. 5
GROUP STRUCTURE
LEGEND
Holding Company Division Corporate Entity Joint Venture International Subsidiary
GODREJ & BOYCE
Appliances
Construction
Electricals
Interio
Lawkim Motors
Locks
Material Handling
Precision Engineering
Precision Systems
Prima
Process Equipment
Security Solutions
Storage Solutions
Tooling
Godrej Infotech
Godrej Efacec
GODREJ INDUSTRIES
Chemicals
Estate
Finance
Godrej Consumer Products
Godrej Properties
Godrej Agrovet
Godrej Household Products Limited
Godrej Hersheys
Godrej Tyson Foods
Keyline Brands
Kinky
Rapidol
Godrej Global Middle East
Godrej Nigeria
Megasari Group
Issue Group
4. 9
SOME INTERESTING FACTS
Godrej touches the lives of 470 million Indians everyday
• The Godrej brand touches more Indians on a daily basis than any other Indian
owned group or brand today
• Godrej sells 6 billion candies a year, that’s approximately one candy for every
man, woman and child on the planet
• We produce over 1 billion cakes of soaps a year, and the Godrej No.1 soap is
amongst the highest selling soaps in the country
• Godrej sells one refrigerator every 30 seconds in India
• Business Week lists GCPL amongst Asia’s 100 fastest growing Companies
• Three out of every four Indian banks are secured by Godrej
• Godrej manufactures Cryogenic engines that power India’s space program
5. operations, as shown in the figure below.
Godrej in the UAE
Godrej has been exporting its products to the UAE
market for the past 30 years. Godrej and Boyce,
one of the premier companies of the Godrej
Group, has set up its own establishment, Godrej
Global Mid East FZE , at the Sharjah Airport
International Free (SAIF) Zone in 2002.This
establishment oversees the entire operations
of Godrej and Boyce in the Middle East.
Godrej products are offered in the UAE through
seven divisions of Godrej and Boyce, which include
the Security Equipment Division, the Furniture &
Interiors Group, the Storage Solutions Group, the
Material Handling Equipment Division, the Locks
Division, the Precision Equipment Division and the
Prima Division.The company also plans to
Company Background
The Godrej Group was established in 1897 by
Ardeshir Godrej. Headquartered at Mumbai in India,
the group is headed by Adi Godrej, the Chairman
of the group.The Godrej Group is one of the oldest
and largest engineering and consumer products
groups in India. It is involved in the businesses of
consumer products, office equipment, consumer
appliances, chemicals, agri products, security
equipment, office automation, industrial products,
storage solutions, precision equipment, construction,
furniture, automated warehousing, process
equipment, machine tools and material handling.
Apart from India, the Godrej Group has operations
in the USA, the UK, Singapore, Malaysia, Oman,
the UAE, Nepal, Sri Lanka, Bangladesh, South Africa,
Vietnam, China and Romania. Currently, Godrej
products are available across the Middle East,
Africa, South East Asia, Europe, North America
and the SAARC countries. In order to cater to
the increasing demand from the overseas market,
the group has set up manufacturing facilities in
Oman, Singapore, Malaysia and Vietnam.
The Godrej Group registered total sales of
approximately US$ 1.3 billion in the financial year
ending 31 March 2006 (FY06).The group employs
a workforce of approximately 23,000 personnel.
Godrej in the Arab World
The Godrej Group generated approximately
15 per cent of its total revenue from overseas
GODREJ GROUP
The Godrej Group Revenue Break-up: 2005-06
Source: OneSource
(Press Trust of India, 23 June 2006)
Domestic Markets
International Markets
85%
15%
6. also supplied 42 Strong Room doors to the Gold
Soukh in Sharjah. It has also received a large order
for furniture and storage solutions from the
National Guard of Saudi Arabia.The precision
engineering department of Godrej received large
orders from Kuwait and Qatar worth nearly
US$ 6 million.Thus, the company's focus on
quality and cost has propelled the success of
Godrej in the Middle East.
Streamlined Distribution and Supply Chain
Godrej also owes its success in the Middle East to
its supply chain management system. Its structured
supply chain ensures the timely delivery of Godrej
stocks to its distributors in India and abroad,
thereby minimising inventories. In this system,
Godrej continuously tracks the sales of its products
at the distributor level and replenishes stocks
whenever the demand from a particular distributor
increases.This enables the group to respond
quickly to global market fluctuations.
Future Plans
Focus on Growth in the Middle East
The Middle East region offers tremendous potential
for business growth.This is because of the new
projects set to begin in the UAE, re-export
opportunities, and the reconstruction work being
carried out in Iraq. Pursuing its vision statement -
'Godrej in every home and workplace' - the Godrej
Group plans to expand its product offerings in the
Middle East market. Godrej plans to launch new
products in this region that are suitable for
domestic and commercial purposes.
Godrej also plans to expand its marketing and
distribution network in the Middle East to offer
its products across the UAE, Kuwait, Oman, Qatar,
Saudi Arabia and Yemen.
introduce its appliances division in the UAE.
Godrej Agrovet, one of the companies of the
Godrej Group focusing on the agricultural sector,
has acquired controlling stakes in Al-Rahaba, a
company that runs broiler farms in the UAE.
Godrej in Oman
Godrej and Boyce, along with the Khimji Group of
Oman, has set up a manufacturing unit in Oman to
manufacture furniture and other products.
Godrej (Malaysia) Sdn. Bhd. and Godrej (Singapore)
Private Limited, subsidiary companies of the Godrej
Group have established an associate company in
the Sultanate of Oman, which manufactures the
following range of products - steel office furniture,
shelving systems, security equipment and custom-
built steel fabrications.These products are
exported to various regions in the Middle East.
Godrej in Other Arab Countries
Godrej Consumer Products Limited, a premier
company of the Godrej Group and a major FMCG
player in India, exports its products to Bahrain,
Kuwait, Oman, Qatar, Iraq, Saudi Arabia, the UAE,
Sudan,Yemen and Egypt in the Middle East. Godrej
Sara Lee, a joint venture with Sara Lee
International, also exports its products to a lot of
these countries and is the market leader in Yemen
with the Jet brand.
Success Factors
Focus on Quality and Cost
Godrej attributes its success in the Middle East
to its focus on quality, innovative designs and world
class manufacturing facilities, which enables the
company to offer competitively priced products
to its consumers. Godrej safes account for
approximately 35 per cent of the market share
in the UAE and are widely used in jewellery shops.
Its steel storage products line occupies an
estimated 20-per cent market share. Godrej has
25
7. 16
Home care built around household insecticides
Hair care built around hair colour
Personal wash
THE BENEFITS OF FOCUS
Leverage a common innovation pipeline
Compete effectively against global competitors
Leverage scale and scope synergies in sourcing and operations
Launch other GCPL categories in these geographies over time
Indian operations can use Latin America
as a strong source of learning and
innovation in hair colours
Operational efficiency strengths in Indian
insecticide operations transferred to
Indonesia, Bangladesh, etc
Common purchase of active ingredients
and perfumes in both household
insecticides and hair colours across
global portfolio
Categories of
focus
Benefits of
focus & scale
Cross
pollination
between
geographies
16
8. 17
Primary focus for growth will continue to be domestic (within India)
However, we will also tap into growth opportunities available in attractive emerging markets
This will be largely through acquiring strong local brands with seasoned management teams
GLOBALIZATION STRATEGY OBJECTIVES
Leverage GCPL’s fundamental proposition (superior quality affordable products) in markets with
significant middle and bottom of the pyramid population
Add tremendous value to regional jewels in our markets of choice through the rigor of our
processes, operational discipline, manufacturing and sourcing strengths, etc
Bring back learnings and technology for the Indian market and strengthen our domestic
portfolio
On a long term basis, not more than 30-40% of GCPL’s revenues and profits
We will look at strong regional brands with a relative market share > than 0.5
Great growth and developmental opportunities for our employees through global exposure
Business
focus
Investment
thesis
Goal for
international
business
Employee
proposition
17
9. 18
Asia, Africa and South America are the world’s fastest growing continents
We operate household insecticides, hair colour and personal wash as our core categories in India
We have focused on three core categories emerging from this strong local base in scanning the 3
identified continents - household care, hair care and personal wash
Based on the development of these categories in the countries in these 3 continents, we have a further
shortlist of countries within Asia – China, Indonesia, Malaysia, Vietnam and the SAARC countries
OUR 3 X 3 STRATEGY
Strength of management teams is one of the most critical criteria in assessing targets
Aligning incentives with management teams for taking local businesses to full potential
Ensure that autonomy is maintained - central resources are deployed as per need
Deploy Godrej resources in HR, Finance and Operations to cross-pollinate Godrej processes
Clear process for reviews and sharing
Rigorous screening of opportunities
Strong understanding of each market
Robust investment thesis
Detailed due diligence
Markets &
categories
Values based
Partnering
approach
Disciplined
M&A
18
10. 22
SUCCESSFUL TRACK RECORD OF PRODUCT
INNOVATION & LAUNCHES
Godrej Protekt – Hand Sanitizers, Hand Wash
& Wioes Launched in 2010
Premium Hair Color Brand
Launched in mid year 2010
Lime & Aloe Vera and Moisturizing Soap
launched in 2010
Launched Salon Kit in 2010
Low Smoke Coils, Mosquito Cream,
Mosquito Spray, Seek & kill insecticide
spray
Launched toiletries range in 2010
11. 15
STRENGTHENING CORE BUSINESSES AND BRANDS
Brand
focus
Category
focus
Leadership
focus
15
LEADING MARKET POSITIONS
•#2: soaps in India
•#1: hair colors in India
•#1: home insecticides in India
•#1: liquid detergents in India
•#1: ethnic hair color in South Africa
•#2: hair extensions in South Africa
•#2: medicated soaps in Nigeria
•#2: home insecticides in Indonesia
•#1: air fresheners in Indonesia
•#1: wet tissues in Indonesia
•#2: hair colors in Argentina
14. When Mr. Vivek Gambhir, Managing Director
ventured into a small kirana store, the owner
walked up to him with a sachet of Godrej
Expert Rich Hair Crème, a hair color. Gambhir
was surprised when he expressed amazement
that the company could offer premium
products at an affordable Rs. 30/-. The
smallest pack of even an ordinary rival product
cost no less than Rs.60/-. The retailer
remarked: "You are launching innovative
products almost every quarter when the
rest are cutting spends."
Without compromising on quality, we cut costs through
packaging innovations and smart sourcing: Vivek
Gambhir, Managing Director, Godrej Consumer
Ministering to the masses
15. The 115-year-old company realized it had to do
something quickly to keep consumers interested
Changes done by Goderej :-
• The century-old red and white Godrej logo got
an infusion of blue, pink and green for a more
contemporary look.
• Brighter Ideas
• Instead of giving all its brands premium status,
Godrej tried to change consumption habits at the
bottom of the pyramid by offering quality
products at value prices
• Delight customers with an affordable product
without compromising on quality
• Direct To Trade
• Supply Chain Management
Godrej brought costs down mostly through
packaging innovations
Godrej Powder Hair Dye
became Godrej Expert Rich Hair Crème
Good Knight mosquito repellent became
Good Knight Fast Card
16. Ø Most suitable for Major Distributor supply
who need Full Truck Loads.
Ø Reduces Inventory at W/H level.
Ø Reduces handling and operational cost.
Ø Improve quality of service and customer
satisfaction.
oDirect to trade: Immense SCM Opportunity
Direct To Trade
Factory Stock Point Dealer
17. Sampark: New initiative connecting distributors.
Sahayog: Connect to the suppliers, 1200 distributors,400-450 are A-class distributors
contributing 75-80% of the total business, 750-800 distributors are B & C class.
Benefits:
–Sales orders generated on same day slashing delays.
–Convenient Data Flow
–Portal framework - cutting edge concept
–Daily visibility of Retailing information.
–Lower carrying cost to distributors.
–Reduced Product Stagnation.
–Better Decision Making about forecasting
Supply Chain Management
18. The strategy of offering premium
products for less has worked.
Its top line has grown by 42 per cent
and bottom line by 38 per cent, year-on-
year for the past five years. Its market
capitalization has risen 42 per cent in
the past year to Rs28,317 crore
.
Almost 48 per cent of its revenue comes
from international acquisitions. These
include the Kinky, Rapidol and Tura
brands, and the Darling Group, all in
Africa, Indonesia's Megasari , Makmur
Group in Asia, and the Issue Group,
Argencos and Cosmetica Nacional in
South America
Strengthening Core Business & Brands
19. Clear Focus on 3 X 3 STRATEGY
Godrej have a clear focus on our 3x3
strategy, which is concentrated on three
business categories in three
geographies," , referring to Africa, Asia
and South America. “Godrej continue to
drive growth where they ... have a
competitive advantage, by
providing consumers with superior quality
products at affordable prices."
Relationship with distributors, suppliers &
retailers will give an competitive edge in a
long run. GCPL getting a edge by
connecting close with the Suppliers,
Distributors & Retailers
(Sampoorna in process)
Conclusion