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CASE1 Dabur India Limited: Growing Big and Global

Dabur is among the top five FMCG companies in India and is

positioned successfully on the specialist herbal platform. Dabur has

proven its expertise in the fields of health care, personal care,

homecare and foods.

The company was founded by Dr. S. K. Burman in 1884 as small

pharmacy in Calcutta (now Kolkata), India. and is now led by his

great grandson Vivek C. Burman, who is the Chairman of Dabur India

Limited and the senior most representative of the Burman family in

the company. The company headquarters are in Ghaziabad, India,

near the Indian capital New Delhi, where it is registered. The

company has over 12 manufacturing units in India and abroad. Theinternational facilities are located in Nepal, Dubai, Bangladesh, Egypt

and Nigeria.

S.K. Burman, the founder of Dabur, was trained as a physician. His

mission was to provide effective and affordable cure for ordinary

people in far-flung villages. Soon, he started preparing natural

remedies based on Ayurved for diseases such as Cholera, Plague and

Malaria. Due to his cheap and effective remedies, he became to be

known as Daktar (Indianised version of doctor). And that is howhis venture Dabur got its namederived from Daktar Burman.

The company faces stiff competition from many multinational and

domestic companies. In the Branded and Packaged Food and

Beverages segment major companies that are active include

Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic

medicines and products, the major competitors are Baidyanath, Vicco,

Jhandu, Himani and other pharmaceutical companies.

Vision, Mission and Objectives

Vision statement of Dabur says that the company is dedicated to the

health and well being of every household. The objective is to

significantly accelerate profitable growth by providing comfort to

others. For achieving this objective Dabur aims to:

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Focus on growing core brands across categories, reaching out to new

geographies, within and outside India, and improve operational

efficiencies by leveraging technology.

Be the preferred company to meet the health and personal grooming

needs of target consumers with safe, efficacious, natural solutions by

synthesising deep knowledge of ayurveda and herbs with modern

science.

Be a professionally managed employer of choice, attracting,

developing and retaining quality personnel.

Be responsible citizens with a commitment to environmental

protection.

Provide superior returns, relative to our peer group, to our

shareholders.

Chairman of the company

Vivek C. Burman joined Dabur in 1954 after completing his

graduation in Business Administration from the USA. In 1986 he was

appointed Managing Director of Dabur and in 1998 he took over as

Chairman of the Company.

Under Vivek Burmans leadership, Dabur has grown and evolvedas a multi-crore business house with a diverse product portfolio and a

marketing network that traverses the whole of India and more than 50

countries across the world. As a strong and positive leader, Vivek C.

Burman has motivated employees of Dabur to do better than their

besta credo that gives Dabur its status as Indias most trusted

nature-based products company.

Leading brands

More than 300 diverse products in the FMCG, Healthcare and

Ayurveda segments are in the product line of Dabur. List of products

of the company include very successful brands like Vatika, Anmol,

Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant

Manjan with turnover of Rs.100 crores each.

Strategic positioning of Dabur Honey as food product, lead to

market leadership with over 40% market share in branded honey

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market; Dabur Chyawanprash is the largest selling Ayurvedic

medicine with over 65% market share. Dabur is a leader in herbal

digestives with 90% market share. Hajmola tablets are in command

with 75% market share of digestive tablets category. Dabur Lal Tail

tops baby massage oil market with 35% of total share.

CHD (Consumer Health Division), dealing with classical

Ayurvedic medicines has more than 250 products sold through

prescription as well as over the counter. Proprietary Ayurvedic

medicines developed by Dabur include Nature Care Isabgol,

Madhuvaani and Trifgol.

However, some of the subsidiary units of Dabur have proved to be

low margin business; like Dabur Finance Limited. The international

units are also operating on low profit margin. The company alsoproduces several me too products. At the same time the company

is very popular in the rural segment.

Questions

1. What is the objective of Dabur? Is it profit maximisation or growth

maximisation? Discuss.

2. Do you think the growth of Dabur from a small pharmacy to a large

multinational company is an indicator of the advantages of joint

stock company against proprietorship form? Elaborate