- The document provides an overview of the Indian FMCG sector and Patanjali Ayurved Ltd. It notes that the Indian FMCG sector grew at a CAGR of 11-12% from 2003-2015 and is one of the fastest growing in the world. Food and personal care are major growth opportunities. - Patanjali Ayurved Ltd started as a small pharmacy in 1997 and today produces over 800 products across categories. It has seen strong growth with revenues increasing from Rs. 1185 crore in FY2014 to Rs. 2028 crore in FY2015. - The document analyzes Patanjali's business model, value chain, strategies and competitive position versus

1. -Anant Katyayni (G039)
-Rohit Garg (G022)
-Ankit Gupta (G028)
-Deepanshu Sharma (H053)
-Aditya Rane (G045)
-Rohit Aggarwal(G003)
-Tukesh Ranjan (G046)
-Mayank Garg (G021)

2.  CAGR of 11-12% over 2003-15; Expected CAGR of 16.7% over 2015-20
 One of the fastest growing in the world; 4th largest by size
 Food (43%), PC (22%) major growth opportunities
 Availability of key raw materials, cheaper labour costs, presence across the entire value chain- major drivers
Industry Structure: Oligopoly (About 70% largely unorganized)
Major competitors: ITC, HUL, Nestle, Dabur
Market Structure:
Indian FMCG Sector Overview
http://www.ibef.org/industry/indian-retail-industry-analysis-presentation#sthash.dxYL1nxh.dpuf
http://www.nielsen.com/in/en/insights/reports/2014/whats-in-store-for-indias-fmcg-market.html
11.6 14.6 18
37 42
49
110
0
20
40
60
80
100
120
03 06 07 13 15 16 20Year
USD
http://www.statista.com/statistics/419280/size-of-the-indian-fmcg-market/

3. Introduction
Patanjali Ayurved Ltd
 Started as a small pharmacy in 1997 by Acharya Bal Krishna, headquartered in Haridwar
 92% holding by close associate Acharya Bal Krishna (M.D.), 7.2% by London based Poddar couple
 Lacks the ingredients traditionally necessary for building a large scale FMCG brand
– Advertising and Promotional spending
– Celebrity associations
– Distribution network
 Today, it is the most diversified consumer goods firm in India (a part of Patanjali group)
 products ranging from Groceries to Nutritional supplements, Toothpaste to Toiletries, Herbal OTC to
Health drinks. Has ventured into the e-commerce space recently
 Turnover for FY15: Rs 2028.03 Crore (1191.14 Crore in FY14); poised to cross Rs 5000 Crore by 2016
 Net Profit: Rs 316.60 crore for FY15- an increase of 71%
 CAGR during FY12-15: 64.7%
 EMAMI: PAT- Rs 398.23 crore for FY15, an increase of 20.70%
 MARICO: PAT- Rs 577.22 crore for FY15, an increase of 18.44%
http://www.business-standard.com/article/companies/ramdev-turns-his-ayurved-enterprise-into-an-fmcg-empire-115062800143_1.html
“Wish you were listed” -CLSA Report
http://www.business-standard.com/article/markets/patanjali-ayurved-targets-250-revenue-growth-in-fy16-edelweiss-115100900788_1.html

4. 33238
28091
9854
4870 4080 4868
6207
3682 3579
2028 1705
8785
3867
1185 672 565 675 370 577 540 316 398
0
5000
10000
15000
20000
25000
30000
35000
Sales (Crore Rs)
Profits (Crore Rs)
Top 10
Indian FMCG
companies (2015)
http://www.mbaskool.com/top-brand-lists/13560-top-10-fmcg-companies-in-india-2015.html

5. Product Categories
Patanjali
Nutrition and
Supplements
Grocery
Medicine
Books &
Media
Health
care
Personal
care
Home
Care

6. Competitive
Rivalry
HIGH
Threat of
new
entrants
LOW
Power of
suppliers
LOW
Threat of
Substitutes
HIGH
Power of
Buyers
HIGH
• Heavy R&D required
• Wide distribution network required
• Government Rules & policies a barrier
• FDI and Food security bill
• Large number of players
• High price sensitivity
• Aggressive sales promotion
• Large number of choices
• Information is freely available
• Availability of various discount/
sales promotional offers
• Large number of substitutes available
• Low switching cost
• Depends on Utility
• Backward integration
• Large number of suppliers
• Low switching cost
Porter’s Five Forces Analysis for FMCG industry

7. - High quality medicines
manufacture in-house
- Expert Yoga Technical
knowledge
- Completely natural
products without side
effects
- Baba Ramdevji
- Team of 200 well trained
Doctors
- World class facilities
- Farmers as partners
- Partnership with Post
office
- Self owned Stores in
almost all cities
- Partnership with Future
Group & 5000 retail outlets
- One of a kind Integrated
yoga & Ayurveda approach
- Strong association with
the masses
- Unique Distribution
Network
- Backward Integration
- Presence in all cities
- ‘International’ Presence
- In-house Production
- In-house Distribution
- Wide variety of products
- Online store for sale of
products
- Strong Brand presence
specially through baba
Ramdev via News, religious
content broadcast
Internal Environment Analysis

8. The Four Criteria of Sustainable Competitive Advantage
Company Valuable Rare
Costly to
Imitate
Non-
Substitutable
Profit
Outcomes
Quality
Products at low
cost
Direct sourcing
from farmers
and
Cost control
Trade margins
and Price
Unique
Ayurved/Yoga
association
Above
Average
Strong Product
Portfolio
Strongest
Distribution
Scale and
global expertise
Brand Legacy
Top-of-mind
Recall
Above
Above
Average
Strong Product
Portfolio
Presence
across entire
dentifrice
Focused no1 in
the category
Production &
Research
Capabilities
-
Above
Average
Innovative
Products
Good
Distribution
Network
- - Average
Quality
Products at low
cost
- - -
Below
Average
Sustainable Competitive Advantage

9. The Four Criteria of Sustainable Competitive Advantage
Company Valuable Rare
Costly to
Imitate
Non-
Substitutable
Profit
Outcomes
Huge range of
Products
Unique in-
house
Distribution
channel
Trade Margins
and Price
Ayurveda and
Yoga
association
(Baba)
Above
Above
Average
Strong Product
Portfolio
Good
Distribution
Network
Strong Brands
& Global
Exposure
-
Above
Average
Ayurveda
backed up by
Science
- - Brand Legacy Average
Completely
Ayurvedic
products
- - -
Below
Average
Sustainable Competitive Advantage

10. 1. Organic fruits, vegetables & dairy
products
2. Health bars, smoothies & RTE
products
(Incremental Innovation)
1. Technology based solution:
A mobile App integrating a wearable device
with Fitness+Yoga+Dietary features
together
1. Manufactures 800 types of products
across categories at lowest prices
2. Focus on Herbal & Ayurvedic products
without side-effects
1. Ayurvedic remedies/solutions for new
age life-style related diseases
2. Opportunity to cross-sell other yoga-
centric (health/life-style) products
(Innovation Based On Market
Research)
Hamel-Prahlad Model
Served UnservedArticulatedUnarticulated
NEEDS
12
3 4
New Product Development
Customers

11. •In house cultivation of Herbs and medicinal ingredients over 500
acres of Uttarakhand landInbound Logistics
•Zero wastage methodologies at Plants; and at Food & Herbal Parks
•Unlike most firms, invites experts to Research Labs & Plants
•Phenomenally Low overheads
Operations
•In-house distribution through dedicated outlets, now through
web-portal and with Reliance & Future outlets tooOutbound Logistics
•Ayurveda association and appeal for Swadeshi Swabhimaan
•Only large firm growing without loud advertising budgets, Baba
Ramdev himself as face of the brand
•Highest Margins offered under Trade Promotion
Marketing & Sales
•through over 2000 Chikitsalays, 3000 Arogya Kendras, 5000
Swadeshi Kendras spread country-wideService
Value Chain Analysis: Primary Activities

12. •Direct Sourcing from Farmers- Backward Integration
•Total control over Quality of the input materialProcurement
•No fat pay-check hirings, top execs take zero salary
•Specialist researchers; trained people at 10,000 KendrasHuman Resources
•Receives the transfer of technology under the DRDO FICCI ATAC
initiative for commercialization of spin-off technologiesTechnology
•Patanjali Food & Herbal Park (headquartered at Haridwar)
•3 manufacturing units with 177,000 retail outlet reach by mid
2015 (source: Care Ratings report)
Firm Infrastructure
Value Chain Analysis: Supporting Activities

13. Value Chain Analysis: Supporting Activities
Ratings for Five Primary Activities of Value Chain
Company
Inbound
Logistics
Operations
Outbound
Logistics
Sales &
Marketing
Service Total
ITC 8 8 10 7 7 40
HUL 8 10 10 10 8 46
Dabur 8 7 7 7 6 36
PAL 10 7 9 8 7 41

14. 1. Herbal and Health Care
2. Food and Staple
3. Personal Care
South East Asian markets: China,
Singapore, Vietnam, Thailand etc
1. Home & Fabric Care
2. Fitness wearable devices
3. Mobile App (Yoga)
Global
1. Personal Care
2. Health Care & Ayurvedic range
3. Food and Staple
Pan India
1. Home & Fabric Care
2. Snacks and packaged sweets
Pan India
Existing New
ExistingNew
MARKETS
A method to this madness??
12
3 4
Corporate Strategy
Competency

15. Financial Performance & the Road Ahead
450
850
1200
2000
5000
0
1000
2000
3000
4000
5000
6000
2012 2013 2014 2015 2016
Revenue (Crore Rs) Grew without significant A&SP spending
Mainly visible on product placement in News
channels (ABP News) so far
Turning the heat on with setting aside 300 Crore
for going full throttle advertising (DDB Mudra)
Hema Malini approached to be the first brand
ambassador for Biscuit & Noodles
Full category offensive in imminent future
Challenges
•HUL and Dabur focusing back on Herbal
•Late entrant to Advertising game
•Noodle: a risky proposition?
Scaling up and Global expansion

16. Thank You