Project Maricoo

8/2/2019 Project Maricoo

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Dissertation project report

ON

Business strategy of

(Project Report submitted in partial fulfilment for the degree of PGDM)

Prepared By

Rajesh Kumar Nayak

Roll No: - IBS10PGDM012

Under the guidance ofName of Internal Guide:

Mr. Bhagbat Barik

Professor Marketing

Innovation-The Business School, Khurda

Innovation-The Business School

Muktapur Khurda 752055



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OBJECTIVE OF RESEARCH

To analyze the business strategy of Marico with respect to various strategically

tools.

To understand the logistic & value chain in case of Marico.



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SCOPE

By this study, it helps to understand the theoretical aspect.

To know the strategy of Marico and position of Marico in market



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INTRODUCTION

Marico is a leading Indian Group in Consumer Products & Services in the Global

Beauty and Wellness space. Marico is present in more than 25 countries across Asia

and the African continent. The company recorded a turnover of Rs. 31.3 billion (~USD

695 Million) in 2010-11. Our vast portfolio of enduring brands such as Parachute

Advansed, Saffola, Hair & Care, Nihar, Mediker, Revive and Manjal are leading

household names today. Marico's international portfolio includes brands like Fiance,

Haircode, Camelia, Aromatic, Caivil, Hercules, BlackChic, Code 10 and Ingwe Marico's

brands and their extensions occupy leadership positions with significant market

shares in most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice

Treatment, Premium Refined Edible Oils, niche Fabric Care etc. Marico is present in

the Skin Care Solutions segment through Kaya Skin Clinics (101 in India, Middle

East and Bangladesh) and its soap franchise.

Marico's branded products are present in Bangladesh, other SAARC countries, the

Middle East, Egypt, Malaysia and South Africa. The Overseas Sales franchise of

Marico's Consumer Products (whether as exports from India or as local operations in

a foreign country) is one of the largest amongst Indian Companies and is entirely in

branded products and services.



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HISTORY

The company was originally a join venture between a Lever group company

and Nissin of Japan, and its products were distributed through HLL's channels.

In 1988 The Company was incorporated on 13th October, under the name of

Marico Foods Ltd. It obtained the Certificate of commencement of business

on 22nd November.

In 1989 The name of the Company was changed to Marico Industries Limited

w.e.f. 31st October.

In December, the Company entered into an agreement with M/s. Rasoi

Industries Limited for purchase of its unit located at M.I.D.C Industrial Estate,

Jalgaon.

Saffola won the Most Outstanding `Brand of the Year' Award instituted by the

Advertising Club of Mumbai in 1993.

In March 1996, the Company made a fresh issue of 10,00,000 equity sharesof Rs.10/- each, at a premium of Rs.165/- per share, simultaneously with an

offer for sale by the promoters of 26,25,000 equity shares of Rs.10/- each, at

a premium of Rs.165/- per share.

In 2002 Marico Industries Ltd has informed BSE that the Board approved the

Issue of bonus redeemable preference shares of aggregate face value of Rs

290 million. Ratio -- 1:1 on equity enhanced after bonus issue of equity

shares made by the Board on April 18, 2002 and approved by shareholders on

July 18, 2002. The rate of dividend is 8% p.a.Increase in authorised share

capital of the Company from Rs 300 million to Rs 600 million.

Marico acquires HLL`s Nihar for Rs 216 cr in 2006

In 2007 Marico Ltd has appointed Mr. Anand Kripalu as an Additional Non-

Executive Director on the Board of Directors of the Company.



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PRODUCTS

Saffola Hot Oil

Hair & Care Nihar Shanti Badam Amla

Mediker Caivil



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VISSION AND MISSION

'COME WIN' ---- their vision and mission is captured in this acronym, which when

bifurcated means the following: -

Consumers: For they are the reason we exist.

The primary focus of our efforts will be to not only understand what adds greatest

value to the consumer but also change and reinvent ourselves if need be. We will

translate the consumer's needs and desires into marketable products and an ever-

expanding base of loyal consumers, with speed and a quality of response that

surpasses the competition.

Membership: For a sense of ownership empowers us.

Wholesome membership is when a person brings his/her entire being into the

organization. It also gives each member a role in articulating and shaping the destiny

of the organization, which in turn, builds commitment and ownership.



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Excellence: For it unleashes our potential.

We will focus on policies and practices where people produce consistently superior

performances and where people are encouraged to discover their untapped potential.

Wealth: For on it hinges our growth.

All our efforts must culminate in the creation of wealth. We will do so by continuously

adding value in everything we do through a variety of methods. We will use sources

productively, eliminate waste, reduce cycle times and costs and enhance the

consumer base.

Innovation: For it gives wings to ideas.

The future of our organization rests on our willingness to experiment, push in new

and untested directions, think in uncommon ways and take calculated risks.

Continuous improvement should be a part of everyday work. We acknowledge that

failure is inherent in any new initiative. We will commit resources for experimentation

and invest in processes for reviewing and sharing of learning.

Marico's Goals and objectives (which they wish to achieve by 2010)

We commit ourselves to improving the quality of people's lives in several parts of the

world, through branded fast moving consumer products and services.

SWOT ANALYSIS



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Before going to the Marico Companys SWOT Analysis we must understand which

things are included in the SWOT analysis;

SWOT Analysis of Marico Ltd.



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ENVIRONMENT THREAT AND OPPORTUNITY PROFILE

(ETOP)

Environmental scanning usually refers just to the macro environment, but it can also

include industry, competitor analysis, marketing research (consumer analysis), new

product development (product innovations) or the company's internal environment.

Macro environmental scanning involves analysing:

Economy

Government

Legal

Technology

Potential Suppliers

Socio-cultural

http://en.wikipedia.org/wiki/Competitor_analysishttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/New_product_developmenthttp://en.wikipedia.org/wiki/New_product_developmenthttp://en.wikipedia.org/wiki/Competitor_analysishttp://en.wikipedia.org/wiki/Marketing_researchhttp://en.wikipedia.org/wiki/New_product_developmenthttp://en.wikipedia.org/wiki/New_product_development


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Economy

GDP per capita

economic growth

unemployment rate

inflation rate

consumer and investor confidence

inventory levels

currency exchange rates

merchandise trade balance

financial and political health of trading partners

balance of payments

future trends

Government

political climate - amount of government activity

political stability and risk

government debt

budget deficit or surplus

corporate and personal tax rates

payroll taxes

import tariffs and quotas

export restrictions

restrictions on international financial flows

Legal

minimum wage laws

environmental protection laws

worker safety laws

union laws

Sunday closing laws

municipal licenses

laws that favour business investment



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Technology

Efficiency of infrastructure, including: roads, ports, airports, rolling stock,

hospitals, education, healthcare, communication, etc.

industrial productivity

new manufacturing processes

new products and services of competitors

new products and services of supply chain partners

any new technology that could impact the company

cost and accessibility of electrical power

Potential suppliers

Labour supply

o quantity of labour available

o quality of labour available

o stability of labour supply

o wage expectations

o

employee turn-over rateo strikes and labour relations

o educational facilities

Material suppliers

o quality, quantity, price, and stability of material inputs

o delivery delays

o proximity of bulky or heavy material inputs

o level of competition among suppliers

Service providers

o quantity, quality, price, and stability of service facilitators

o special requirements



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Socio-cultural

Demographic factors such as:

o population size and distribution

o age distribution

o education levels

o income levels

o ethnic origins

o religious affiliations

Attitudes towards:

o materialism, capitalism, free enterprise

o individualism, role of family, role of government, collectivism

o role of church and religion

o consumerism

o environmentalism

o

importance of work, pride of accomplishment

Cultural structures including:

o diet and nutrition

o housing conditions

Scanning these macro environmental variables for threats and opportunities requires

that each issue be rated on two dimensions. It must be rated on its potential impact

on the company, and rated on its likeliness of occurrence. Multiplying the potential

impact parameter by the likeliness of occurrence parameter gives a good indication

of its importance to the firm.

http://en.wikipedia.org/wiki/Companyhttp://en.wikipedia.org/wiki/Company


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Financial capability factors of MARICO Company

Cash management

Centralized payment

Decentralized collection

Low investor confidence

Marketing capability factors of MARICO Company

Distribution channel

Wide variety of product

Low company image

Low promotion

Fixed price

Operation capability factors of MARICO Company

Plant location as per raw materials availability

Absorb imported technology

R & D system is so good

MIS system of operation and control system

Personnel capability factors of MARICO Company

Good personnel system

Good industrial relation with other company



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THE BOSTON CONSULTING GROUPS GROWTH-SHARE

MATRIX (BCG)

BCG Matrix Include;

1. Stars are high market share/high growth businesses. The preferred strategy is

growth.

2. Question Marks are low market share/high growth businesses. The preferred

strategies are growth for promising question marks and restructuring or

divestiture for the other question marks.

3. Cash cows are high market share/low growth business. The preferred strategy

is stability or modest growth.

4. Dogs are low market share/low growth businesses. The preferred strategy is

retrenchment by divestiture.



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BCG MATRIX OF MARICO

STAR

It is represented by a SBU or a product having high relative market share and high

market growth rate. It need capital over and above its cash flow to maintain its

market share. However in may be self sustained in terms of cash flow when it is

established and beginning to mature ultimately it becomes cash cow, on maturity,

because it cannot absorb further cash. It cannot absorb further cash; it provides cashfor 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.

These product is in STAR but there cash flow will be less it will be become cash cow

because there use full all over the world.

QUESTION MARK

It represented by a SBU /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 its competitive advantage or divestment.

E.G NIHAR, SAFFOLA (FUNCTIONAL OIL) 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.

CASH COW



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It represent by a SBU/Product having high relative market share and low market

growth rate. It generates substantial cash over and above its investment

requirement. It may be a SBU/Product in maturity life cycle stage. It is not attractive in

long ran due to less market growth rate to meet the investment need of stars on

question marks, over heads and growth strategy is suggested.

E.G SAFFOLA (EDIBLE OIL), SILK N SHINE AND IN THE ABOVE EXAMPLE ITC

COMES.

These product market share is high but there market growth rate is low because

there competitor is so much in market. In the market SAFFOLA OIL competitor is so

much like as FORCHUN OIL , DARA OLI etc.

DOG

It represents a SBU/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. It does

not generate enough cash even for its own continuity. So Retrenchment Strategy

usually by divestment or liquidation is suggested.

It may be in the declining stage of its life cycle. Government policy may retain a dog

artificially.

E.G MAHA THANDA AND IN THIS EXAMPLE MARICO COMES

These product in market so very people know and there marketing is so less to other

product of company.

This product competitor is NAVRAT COLL DABAR Etc.



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GE NINE-CELL MATRIX McKINSEY & Co

This matrix follows two dimensions;

Industry Attractiveness

Market Size and growth rate

Industry profitability

Seasonality

Political Factors

Capital requirements etc.

Business Strength

Relative Market Share

Relative price, service

Knowledge of Customers & Markets

Financial Resources



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Cell 1:

It has high business strength and strong Industry attractiveness. It is suggested the

growth strategy. In long run other players may be attracted and Industry

attractiveness reduces.

E.G: Like as parachute is more attractiveness but now there competitors are so

much but there attractiveness is same as earlier.

Cells 2:

It shows average business strength and high industry attractiveness. So it suggested

growth strategy by building up of business strength.

But if it does not happen it is dangerous.

E.G: Like as Parachute Advanced Oil attractiveness is high but there competition of

this product strength is average because in the market parachute Oil is sold. So that

here, only company change name. The product attractiveness is so much but here

product strength is average.

Cells 3:

It has High Business Strength and attractiveness is medium. Here growth Strategy

suggested.

E.G: Like as NIHAR and SILK N SHINE strength is high but there attractiveness is

medium because their competitors is so much in these product.

Cell 4:



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It has business strength is average and attractiveness is medium. It will be hold and

continue to earn. It say Suggested Stability Strategy.

E.G: Like as SAFFOLA (OIL) there both are average but in the market there are

many products is strong to compare to SAFFOLA.

Cells 5:

It has high business strength and Low attractiveness of Industry can grow by neither

vertical integration nor diversification where its strength can be utilized. Otherwise, it

should be continued to harvest profit.

Cells 6:

It has high attractiveness of industry but low business strength. It suggested stability

and growth for business strength. It may continue to earn in attractive industry or

improve its strength and grow or if it is not possible its divest.

Cells 7 & 8:

In the res zone suggest harvestmen or turnaround strategy .

Cells 9:

It is least attractive and weak, so immediate is suggested.



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STRATEGIC BUSINESS UNIT

Maricos Strategic Business Unit

Consumer Products Business:

Over the past 17 years, Marico has been continually improvising and building new

brands. Marico's Consumer Products Business houses well-known brands such as

Parachute, Saffola, Sweekar,Hair & Care, Nihar, Shanti, Mediker, Revive, Manjal,

among others, which occupy leadership positions with significant market shares in

most categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice Treatment,

Premium Refined Edible Oils, niche Fabric Care etc.

Every month, over 70 Million consumer packs from Marico reach approximately 130

Million consumers in about 23 Million households, through a widespread distribution

network of more than 2.5 Million outlets in India and overseas.



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International Business Group:

The International Business Group of Marico operates in more than 20 countries

spread across Asia, Middle East and Africa and has manufacturing facilities in Egypt,

South Africa & Bangladesh.

The International Business group has witnessed phenomenal growth over the years

and contributes to 25% of Maricos turnover. The company has full fledged

operations in Egypt, South Africa, Middle East and Bangladesh.

In addition, the International Business group is actively involved in creatingopportunities for future growth and has enabled our brands to be present in many

other markets across the globe.

Kaya:

Kaya Ltd (erstwhile Kaya Skin Care Ltd.) was an entrepreneurial leap of faith marking

Marico's entry into skin care solutions business. It was a true reflection of uncommon



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sense for a company in hair care products to move, instead of merely logical product

extensions, straight into skin care services. It attempted to leverage Marico's

strengths in the Personal Care business and in-depth understanding of the needs of

the Indian consumer and her/his desire to enhance her/his natural beauty with the

best cosmetic dermatology procedures available internationally.

Kaya Ltd. has been focused on meeting the emerging needs of the modern day

consumers by providing useful and effective services in the beauty and wellness

space. The pioneering effort has been in the area of skin care with Kaya Skin Clinic.

Over the last 7 years Kaya Skin Clinic has refined the standards and

professionalisms of the skin care industry through innovative, world class treatments

and services that have been tailor made to suit Indian skin.

Kaya Skin Clinic

The philosophy at Kaya is governed by the single value of placing the customer first

at all times. The emphasis, therefore, is to offer personalized, world-class skincare

treatments and services, most suited for Indian skin, in a zen like, state-of-the-art

clinic. Since its first prototype in Bandra in 2002, Kaya Skin Clinics has grown at an

unprecedented pace, with over 100 clinics in India, Middle East and Bangladesh.

Kaya Services

Kaya has a host of services that will help you attain, regain, preserve and protect the

intrinsic beauty of your skin. All this is offered in serene, zen like ambience, under the

reassuring care of dermatologists and experienced skin practitioners, to aid you to

easily look your best, always.

Skin Beauty Services:

Skin polishing and brightening

Kaya Glow

Kaya Back shine

Meso Glow



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Skin Lightening Peel

Kaya Advanced Facial

Kaya Express Glow

BUSINESS LEVEL STRATEGIES

1. Cost Leadership Business Level Strategy

In company attains there competitive advantages & Increased their market share by

offering products and services. Company offering product and services having the

same utility, utility features as competitors products and services. Company

substitute products and services; but the price lower than their competitors. Because

of its core competence in engineering, design, manufacturing, distribution etc.When

there is price elasticity of demand i.e. positive co-relation between price reduction

and demand.

Cost leadership is achieved by Marico Company

Early entry in business.

Accurate demand forecasting.



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High capacity utilization.

High level of standardization of products and uniform services packages.

Aiming at average customer by giving generalized set of utilities & therebyattracting more customers.

Conditions For Cost Leadership Being Successful Are As

Price based competition is so severe that cost becomes an important factor.

Buyers are price sensitive and low price attracts more buyers.

Buyers are many and have bargaining power for price reduction

There are very few ways of differentiation and it is not important to customers.

Advantages of Cost Leadership Are As Following:

In company it protection against competition if a company make lower structure of

products.

There is less effect because powerful suppliers bargain for high price so that such

price rise to better absorbed in low cost structure.

It serves as entry barrier to new company which can not produce at lower price.

Company has so many products so that company use these strategy for there

product market share increase in market. If company not use these strategy for there

product company not sell there product in market because companys so many

competitors. So many products growth is so much as compare to there anther

products.



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2. Differentiation Business Level StrategyCompany make such product/services is differentiating from there competitors.

Which are not offered by competitors. Company see the which customers are ready

& willing to pay premium price which can compensate additional cost of

differentiation.

Company Make Differentiation at These Point

By enhancing the quality i.e. offering stronger, bigger, better, vastly, improvedproducts.

By enhancing versatility, safety, utility and convenience for customers to

match their tastes and preferences.

By changing size, weight, materials. Accessories of products i.e. from of

products.



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By style improvement by increasing aesthetic appeal, by symbols, by media,

by atmosphere, by new packaging etc.

By improving the quality of inputs i.e. raw materials.

By better durability, reliability, design, process of manufacturing, modern,

technology, collaboration with valued partner, unique location etc.

By lower operational cost of using the products/services.

By offering complete range of products /services etc.

By coverage, expertise and performance of channels.

Company make product for Skin is KAYA Skin Care these is so much

differentiation to other.

Company make for night crme is PARACHUTE NIGHT REPAIR CREME.

GROWTH STRATEGY

Growth is a way of life. Almost all organizations plan to expand. This strategy is

followed when an organization aims at higher growth by broadening its one or more

of its business in terms of their respective customer groups, customers functions, and

alternative technologies singly or jointly in order to improve its overall performance.



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There are five types of expansion (Growth) strategies

Expansion through concentration

Expansion through integration

Expansion through diversification

Expansion through cooperation

Growth through Acquisitions



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Marico has acquired five companies in the last 18 months to expand its product linesand business. The company acquired a number of brands such as Aromatic soap inBangladesh, Manjal toilet soap and Nihar hair oil in India, and Fiance hair carebrand in Egypt. The Ready Group's Fiance hair care brand has captured 20 percent of the Egyptian market. Marico is leveraging the popularity of the Fiance brandto expand its business in Egypt and other parts of the Arab world.

VALUE CHAIN ANALYSIS OF MARICO



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Concept

A value chain is a chain of activities for a firm operating in a specific industry. The

business unit is the appropriate level for construction of a value chain, not the

divisional level or corporate level. Products pass through all activities of the chain inorder, and at each activity the product gains some value. The chain of activities gives

the products more added value than the sum of added values of all activities. It is

important not to mix the concept of the value chain with the costs occurring

throughout the activities.

Activities

The value chain categorizes the generic value-adding activities of an organization.

The "primary activities" include: inbound logistics, operations (production), ,

marketing and sales (demand), and services (maintenance). The "support activities"

include: administrative infrastructure management, human resource management,

technology (R&D), and procurement. The costs and value drivers are identified for

each value activity.

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Profit Profit margin

Margin

Primary activities of MARICO


Administrative Infrastructure Management

Human Resource Management

Technology (R&D)

Procurement

Inbound Operation Outbound marketing services

logistics logistics & sales

Primary

activities

Support

activities
http://en.wikipedia.org/wiki/Procurementhttp://en.wikipedia.org/wiki/Procurement


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Inbound logistics

These are the activities concerned with receiving the materials from suppliers, storing

these externally sourced materials, and handling them within the firm.

Here goods are received from a company's suppliers.

They are stored until they are needed on the production/assembly line. Goods

are moved around the organization.

MARICO purchase their raw material from all around the world.

In order to maximize their availability of raw material MARICO maintain good

relationship with their suppliers. MARICO use JIT (Just in Time) approach for handling of raw material.

Operations

These are the activities related to the production of products and services. This area

can be split into more departments in certain companies. For example, the

operations in case of a hotel would include reception, room service etc.

This is where goods are manufactured.

Operations could include organizing the parts to make final FMCG Product.

MARICO are known for their reliability which comes from efficient operations.

Outbound logistics

These are all the activities concerned with distributing the final product and/or service

to the customers. For example, in case of a hotel this activity would entail the ways of

bringing customers to the hotel.

The goods are now finished, and they need to be sent along the supply chain

to wholesalers, retailers or the final consumer.

MARICO manage their Distributor and Super Distributor in different rural and

urban area.

MARICO make their product easily assessable.



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Marketing and sales

This functional area essentially analyses the needs and wants of customers and is

responsible for creating awareness among the target audience of the company about

the firms products and services. Companies make use of marketing communicationstools like advertising, sales promotions etc. to attract customers to their products.

MARICO given TV ads and magazine for a marketing.

This area focuses strongly upon marketing communications and the

promotions mix.



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MARICOs Supply Chain

Service

There is often a need to provide services like pre-installation or after sales service

before or after the sale of the product or service.

This includes all areas of service such as final checking, after-sales service

Like quality, quantity, packaging, weight etc..

MARICO values their customers.

Support activities of MARICO

Procurement



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This function is responsible for purchasing the materials that are necessary for the

companys operations. An efficient procurement department should be able to

obtain the highest quality goods at the lowest prices.

This function is responsible for all purchasing of goods, services and

materials.

The aims to secure the lowest possible price for purchases of the highest

possible quality.

MARICO will be responsible for outsourcing and e-Purchasing (using IT and

web-based technologies to achieve procurement aims).

Human Resource Management

This is a function concerned with recruiting, training, motivating and rewarding the

workforce of the company. Human resources are increasingly becoming an important

way of attaining sustainable competitive advantage.

Employees are an expensive and vital resource. MARICO manage recruitment and

selection, training and development, and rewards and remuneration. MARICO

consider their employees as HUMAN CAPITAL. Equal support comes from our HRD

team, which expends its energies, formulating and building strategies to build a

stable and high - talent organisation. The innovations and the quest for excellence at

Marico continue unabated. Even as the success stories continue, the focus from the

consumer never shifts.

Toyota motors uses following techniques to retain their employs

Recruitment

Selection

Training and development

Compensation

Maintenance

Technology Development

This is an area that is concerned with technological innovation, training and

knowledge that is crucial for most companies today in order to survive.



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Technology is an important source of competitive advantage.

Companies need to innovate to reduce costs and to protect and sustain

competitive advantage. MARICO implemented production technology, Internet marketing activities,

lean manufacturing, Customer Relationship Management (CRM), and many

other technological developments.

Firm Infrastructure

This includes planning and control systems, such as finance, accounting, and

corporate strategy etc.

This activity includes and is driven by corporate or strategic planning.

MARICO implemented Management Information System (MIS) and other

mechanisms for planning and control in different departments.

Project Maricoo

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