SWOT Analysis

Strengths:
Low operational costs
Presence of established distribution networks
in both urban and rural areas
Presence of well
-known brands in FMCGsector
Favourable governmental
Policy:

Indian Government has passed thepolicies aimed at attaininginternational competitiveness

through
Weaknesses:
Lower scope of investing in technology
and achievingeconomies of scale, especially in smallsectors
Low exports levels

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lifting of the quantitative restrictions,reducing excise duties, 100 per centexport oriented units
can be set up bygovernment approval and use of foreignbrand names etc
.
FDI: Automatic investment approval up to
100 per cent foreign equity or 100 per cent forNRI and Overseas Corporate Bodies investmentis
allowed for most of the food processingsector except malted food, alcoholic beveragesand
those reserved for small scale industries(SSI).
Opportunities:
Untapped rural market, changing life style
Rising
income levels, i.e. increase inpurchasing power of consumers
Large domestic market with more population
o
High consumer goods spending
India is the largest milk producer in the
world, yet only around 15 per cent of the milkis processed. The organized liquid milkbusiness is
in its infancy and also has largelong-term growth potential. Even investmentopportunities exist
in value-added productslike desserts, puddings etc.
Only about 10
-12 per cent of output isprocessed and consumed in packaged form,thus highlighting the huge
potential.

India is under penetrated in many FMCGcategories as shown in below diagram. Withrise in per
capita incomes and awareness, thegrowth potential is huge.
Lower price and smaller packs are also likely
to drive potential up trading for major FMCGproducts

 Rural demand etc.

Threats:
Removal of import restrictions resulting
inreplacing of domestic brands
Tax and regulatory structure
Rural demand is cyclical in nature and
also depends upon monsoon.