IFFCO - Market Leader in Fertilizer Industry This is project on Strategic Analysis of IFFCO. In this study, corporate strategy and business strategy of iFFCO was studied. All the models of strategic management which includes External and Internal Environment affecting the organization, SWOT Analysis, Porter's Five forces Internationalization strategies, growth strategies of IFFCO were studied. Recommendations were also shared with the organization

1. Project Report
Strategic Analysis of IFFCO
Presented By:
Himanshi Karmakar
Roll No. 04

2. Company Overview
“During mid- sixties the Co-operative sector in India was responsible for distribution of 70 per cent of fertilizers consumed in the country. This Sector had adequate
infrastructure to distribute fertilizers but had no production facilities of its own and hence dependent on public/private Sectors for supplies.
To overcome this lacuna and to bridge the demand supply gap in the country, a new cooperative society was conceived to specifically cater to the requirements of farmers.
It was an unique venture in which the farmers of the country through their own Co-operative Societies created this new institution to safeguard their interests. The number
of co-operative societies associated with IFFCO has risen from 57 in 1967 to 38, 155 at present.
1967 2018-19
Turnover
27,852 Crores
Total Income
28,546 Crores
Total Production
81.49 Lakh MT
Cooperative Members
Over 35,282
Membership
57 cooperatives

3. Vision and Mission
Vision
• To augment the incremental incomes of farmers by helping them to increase their crop productivity through the
balanced use of energy efficient fertilizers; maintain the environmental health; and to make cooperative societies
economically and democratically strong for professionalized services to the farming community to ensure an
empowered rural India.
Mission
• “To enable Indian farmers to prosper through timely supply of reliable, high quality agricultural inputs and services in
an environmentally sustainable manner and to undertake other activities to improve their welfare".
• To make plants energy efficient and continually review various schemes to conserve energy.
• Commitment to health, safety, environment and forestry development to enrich the quality of community life.
• Foster a culture of trust, openness and mutual concern to make working, a stimulating and challenging experience
for stakeholders.
• Building a value driven organization with an improved and responsive customer focus.

4. External Environment
PEST Analysis
Political Trend
Production and import of fertilizer subsidized by
Govt.
Urea, govt. provides concession in the rates of gas.
No custom duty on import of Rock phosphate and
phosphorous.
Tax relaxation by Govt.
Economical Trend
Bans on export of fertilizers to gain economic
stability.
Govt. has provided subsidies to the extent for supply
and to facilitate import and production of fertilizer.
Social Trend
Proper disposal of waste as it can lead to major
disease.
However, artificial fertilizers cannot be brought to an
end because it save time of farmers, also preference
for artificial fertilizers than bio fertilizer.
Technological Trend
Development of environmental friendly procedures to
avoid pollution.
Capability to meet international standards of
production and capacity utilization.
Techniques such as de-bottle necking and energy
conservation used to increase efficiency, capacity
utilization, and lower cost per ton.

5. Five Forces Model of Competition
Bargaining power of Suppliers - High
1. Raw materials for fertilizers production are
NP.
2. Few suppliers of fossil fuel, few sources of
rock for phosphate fertilizer.
3. Difficult to cope up with the costs of gas.
4. Dependence on private energy suppliers
Threats of New Entrant
Entry barriers are high
1. Supply side economies of scale
2. Demand side benefits of scale
3. High Customer switching costs
4. Huge capital Investment
5. Restrictive Govt. policy
Threat of Substitutes
1. Threat of Substitutes (HIGH):-
2. Bio fertilizers, Organic fertilizers
3. No proper substitutes
4. Natural fertilizers are often used but
not as effective
Bargaining power of Buyers - Low
1. Difficult to provide maximum supply of all
fertilizers.
2. Very High Demand and low productivity.
3. Lack of govt. support for distribution
channels.
4. Low availability when high demand season.
5. High cost of fertilizers
Competitive Rivalry – High
1. Public player prices lower
than private players.
2. Different suppliers of RM
leads to cost
competitiveness & quality
of products.
3. Private companies
capturing rural market.
4. Cost competitiveness
between private and
public.

6. SWOT Analysis
Strength
Biggest fertilizer company and
producer in Asia
Demand greater than Production
Co-operative societies in Large.
Fully modernized plants.
Weakness
Dependence on government subsidies.
Price and distribution, controlled by
government.
As per by laws, sell products through
co-operative channel only for sale of its
product.
Higher stock inventory, when demand
fall short
Opportunities
Insufficient production, import fertilizers
from other countries.
High demand-supply gap for the
product.
Various areas of industries are still
untapped by IFFCO.
Explore the option of forming JV‘s.
Threats
Growing private sector.
NG supply in the country is not
sufficient to meet present country
requirement.
Supply of Rock phosphate is also a
threat.
Unstable in the international market.

7. Business Strategy
• Expansion/revamping of existing Fertilizer Plants
• Setting up of Joint Ventures projects in countries having abundant and cheaper raw materials.
• Adopting alternative sources like liquefied Natural gas to overcome the constraints in the domestic availability of
natural gas.
• Proactive in nature, diversifying, joint ventures, etc., maintaining leadership.
• Market leadership through efficient value chain management.
• Economies of Scale and business diversification
• Affordability and easy accessibility of all of its products.
• Benefit on purchase of product such as Insurance.
Cost Leadership - Lowering the Cost
• Design, Quality or Convenience by selecting a strategy that is different
among the competitors.
• Brand logo established a strong brand image in consumers’ mind.
Differentiation Strategy
Competitive Advantage

8. Business Plan
• 5 marketing territories
• 5 production Unit
• Distribution through coop. System
• Supplies to few Agro-industries
• IFFCO farmers Service Channel
• Maximum Transportation by rail (88%)
• Warehousing at godowns such as CWC,SWC and Federation godowns
• Owners are consumers
• Non - Functional Directors from Cooperative societies farmers

9. Corporate Strategy
Diversification Strategies
• Fertilizer
• General Insurance
• International trading
• Special Economic Zone
• Power Generation
• Rural telephony (IKSL)
• Farm Forestry (IFFDC)
• Commodity Exchange (NCDEX, NCMSL)
By Acquisitions
Horizontal Integration - Investment in Joint
Ventures such as OMIFCO, ICS, IEFC. All these
are major Fertilizers company out of India.
By forming Joint - ventures
Vertical Integration - Ventures such as IFFCO-
Tokio, IFFCO-MC, etc.,
Diversification in e-commerce like E-Bazar.

10. Growth Strategies
• Focus on AI for deep insights into business operations and predictive maintenance, analytics for
sales and production forecasting, for our management reporting and also to devise a strategy for
the future.
• Sustainable Development: Patented Nano fertilizers, organic fertilizers that can improve the soil
texture and not have a negative impact on the environment. MoU, Iffco and the ICA’s Africa , also
empower African farmers by organizing training, integration and development programs.
• Traditional Firm looking for voice-enabled platform for helping its various stakeholders --
employees, retailers, and farmers by partnering with Oracle to develop voice enabled Chabot's

11. Internationalization Strategies
• Enhancing presence in International markets through Strategic Joint Ventures and Synergistic Acquisitions/Expansions.
• Investment in Egypt, forming a joint venture with Egyptian company, for Backward Integration facilities and purchase the entire quantum of
phosphoric acid produced at the Egyptian plant. ENMC would supply rock phosphate required for the plant.
• Acquiring 85% stake in Senegalese for phosphate as it is scarce and 15 percent stake in Australian rock phosphate miner firm Legend
International for a total investment of $100.5 million.
• Joint effort with other Indian producers to tie-up supplies overseas for potash reserves, another key input that is in short supply locally
• Kisan International Trading - : Activity: Shipping and logistics for finished fertilisers and fertiliser raw materials and investments in new
overseas Joint Ventures.

12. Key Success factors
• Dominant market position in the Fertilizer Industry, and diverse income streams.
• 30% market share, wide customer base, distribution network, strong brand equity.
• Healthy operating efficiencies of the plants – high capacity utilization, low energy consumption, etc.,
Challenges
• Moderate debt protection metrics due to working capital-intensive operations.
• Exposure to risks related to regulated nature of the fertilizer industry.
• Infrastructural Bottlenecks
• Greater dependency on imports
• Unable reduce burden of government in subsidiary rates

13. Recommendations
 Maintain the quality standards:
 Restructure the Training and promotional programs, also start conducting non farming programs.
 Company should try to improve the distribution network.
 The company should think on the financing schemes so that poor farmers should get IFFCO products at even those times
when they do not have sufficient cash to buy its products and hence for the better production of their crops.