STRATEGIC MANAGEMENT CIA – 1

A Report submitted in partial fulfillment of the requirements for the degree of MBA

Submitted by
YUKENDHAR G S
2028225

Submitted to
Prof. Laxmi Narayanan

MBA PROGRAMME

SCHOOL OF BUSINESS AND MANAGEMENT CHRIST

(DEEMED TO BE UNIVERSITY), BANGALORE
 INTRODUCTION

In today’s competitive world, it is very necessary for each company to stay ahead of the
competition and drag more customers to their firm. So, in order to be the market leader of any
industry, each company should give more importance in formulating efficient and effective
strategies. A corporate strategy aids collaboration between departments, allowing units to make
decisions that support the company's overall direction. Behind the success of every firm, there is a
strong strategy which they have adopted. In this report, with the example of Dabur ( FMCG
company), I would be covering about the necessity of efficient strategies. Report also covers on
below mentioned topics.
• Opportunities and challenges of Dabur Globally

• Impact of challenges and opportunities on corporate and divisional level

• Application BCG Metrix

• Strategies adopted based on certain problems

Over its 120 years of existence, the Dabur brand has stood for goodness through a natural lifestyle.
An umbrella name for a variety of products, ranging from hair care to honey, Dabur has consistently
ranked among India’s top brands. Its brands are built on the foundation of trust that a Dabur offering
will never cause one harm. The trust levels that this brand enjoys are phenomenally high. While Ries
and Trout may ask “What does Dabur stand for—shampoo or digestive tablets?” The answer is fairly
simple, it stands for India’s fourth largest fast moving consumer goods company that both consumers
and trade respect and trust unequivocally, and which has an annual turnover of over Rs 15 billion.
The company has kept an eye on new generations of customers with a range of products that cater to
a modern lifestyle, while managing not to alienate earlier generations of loyal customers. Dabur is
an investor friendly brand as its financial performance shows. There is an abundance of information
for its investors and prospective information including a daily update on the share price (something
that very few Indian brands do). There’s a great sense of responsibility for investors’ funds on view.
This is a direct extension of Dabur’s philosophy of taking care of its constituents and it adds to the
sense of trust for the brand overall.

OPPORTUNITIES AND CHALLENGES GLOBALLY

·
Opportunities

People's living standards are rising all around the world as growing economies arise,
providing an excellent opportunity for Dabur to position the right products in the right
places.
The millennial age is becoming a larger portion of Dabur's target market, and by
focusing on their demands and catering to them, the company may achieve faster growth
and bigger profitability.
A huge portion of the public is already influenced by social media, and if Dabur can
divert their TV commercials to social media, they will be more effective at a lower
cost.
Dabur can use the new technologies to implement a differentiated pricing strategy in
the new market. It will allow the company to keep its existing consumers by providing
excellent service while also attracting new customers through additional value-oriented
propositions.

The new tax policy has the potential to have a big impact on company practices and to
provide new opportunities for established firms like Dabur to boost their profitability.
Changing consumer behavior trends is also an opportunity for consumer giant like
Dabur.

Challenges

Big retails stores are arising with their own private label brands and since Dabur’s
business is very hooked in to retailers this is often an enormous threat.
Competitors like Nestle, P&G makes it harder to sustain within the market. Continuous
launch of latest products, with competitive pricing, is what it takes to fight with this threat
As the company is working in numerous countries it's exposed to currency fluctuations
especially given the volatile political climate in number of markets across the planet.

Over the years the corporate has developed numerous products but those are often response
to the event by other players. Secondly the availability of latest products isn't regular
thus resulting in high and low swings within the sales number over period of your time.
IMPACT OF CHALLENGES AND OPPORTUNITIES ON DIVISIONAL AND
CORPORATE LEVEL STRATEGY

In order to remain competitive in the market, Dabur had to efficiently use its opportunities and
make strategies to overcome its challenges. So, the opportunities and challenges made the
corporate and divisional level to rethink about innovative strategies to remain competitive in the
market. The steps that they took during strategy formulation include:
Strategy Formulation
Levering brand portfolio: Protects the rural market from purchasing fake products by the
proliferation of portfolio
Competitive pricing: Rising competition and changing consumer preference leads to brand
switching. Rising inflation also increases the product price.
Cost efficient steps: Rise in raw material price as well as uncertainty in movement of goods
are rising the operation cost. So here there is a need for reducing the cost associated with
operations
Strategy Evaluation
Leveraging brand proliferation: This helps to compete with competitors’ fake products,
retaining the costumers as well as attracting new ones. The efficient supply chain network
allows the company to reach to more customers efficiently
Competitive pricing: The idea of reducing the price of product is less efficient, as company
is facing high cost in terms of input and operation cost. Price war can happen due to
reducing the price of products.
Cost efficient initiatives: Reducing the operation and advertisement cost help the company
to achieve competitive advantage. But to remain competitive, FMCG companies require a
lot of advertisements and promotions. So, this cannot be an efficient measure.

Alternative Choice
Leveraging and disseminating the brand portfolio is the best option for solving the problems
companies face. Dabur has the competitive advantage of owning many strong brands with a strong
supply chain and distribution network. They need strong resources to be allocated to develop
brands that cover different market segments at different prices. This allows consumers to cover
different market segments at different prices, preventing shoppers from turning to competing
brands, thus preventing value wars.

Strategy Implementation
DABUR does not need to change the culture or structure of the organization to execute the strategy.
With a strong supply chain and distribution network, the organization helps brands reach their
customers like any other.

APPLICATION OF BCG MATRIX

In order to stay ahead of the competition from Nestle, P&G and also from the local brands, Dabur
had to go with leveraging the brand portfolio. Inorder to understand the portfolio management, it
uses BCG Matrix

Star (HIGH Market Share, HIGH Market Growth): They hold a high market share in
growing market so that it requires more investment to remain competitive as the rivals
come up with more innovations. Chyawanprash is a good example. Despite its present
stature, endured funding withinside the patented TESS technology (which makes use of the
herbal essence pressed from freshly picked leaves) enabled a worldwide re-release of
Chyawanprash with 5.6% increase in growth.
Cash Cow (HIGH Market Share, LOW Market Growth): These are the most popular
products from a few years ago in industries that have since reached saturation. For firms
like Dabur, this is likely the most important category of brands because they require very
little more expenditure to create revenue. Dabur's toothpaste is a cash cow, with sales just
about holding their own in a toothpaste market that is slowly declining in India and
Bangaladesh. In recent years, Toothpaste investment has primarily been limited to
advertising efforts.
Question Mark (LOW Market Share, HIGH Market Growth): They are often
relatively new brands that have yet to realize their full potential in the industry, and as a
 result, they require the most investment from the success of Cash Cow businesses in order
to capitalize on the quick market expansion ahead of competitors. Excess profit from
brands such as Toothpaste has been re-invested in new innovative brands such as honey.

Dog (LOW Market Share, LOW Market Growth): These are the products that have
outlived their usefulness and are unlikely to generate any future earnings.

BLUE OCEAN STRATEGY OF DABUR:

The blue ocean strategy aims to differentiate companies and brands like Dabur India in order to
raise customer awareness, establish a foothold in a new market, and generate demand. The blue
ocean strategy focuses on building demand in uncontested market area, thereby distancing itself
from the competitors. Industry players like Dabur India are able to reconstruct the market limits as
well as the industry structure via their plans and activities using the blue ocean method. The
industrial structures are believed to be flexible rather than inflexible in the blue ocean model and
framework.

The blue ocean model and framework have enabled Dabur India to explore new market areas that were
previously uncompetitive or underutilised by companies in the current business climate. Dabur India
has been able to develop fresh demand as a result of this rather than fighting over and encroaching on
current competition space. Dabur India has been able to achieve quick expansion as well as higher
profitability as a result of this. When Dabur India implements the blue ocean approach, it alters the
laws of the game and eliminates the competitors, making them unimportant and unimportant
environmental variables.

STRATEGY FOR A DIFFERENT COUNTRY BASED ON THE LOCAL ENVIRONMENT.

Consumer goods group of Dabur Struggles (India and US)

Dabur is expected to fail its full-year revenue growth forecasts and endure further difficulties in
2020, as the consumer products company battles with sluggish sales in two of its most important
markets: the United States and India. Underlying sales growth for 2019 and the first half of 2020
is expected to be below 3%, according to the business.
Strategy: Dabur’s portfolio of divisions, geographies, and channels, as well as how they evolve
over time, determine its growth and profitability. Dabur’s strategy and business strategies are built
to guarantee that resources are directed to the categories and markets that have the most long- term
potential for Dabur.

Environmental Pollution by Plastic (Greenland)

Customers prefer to go with the brands that are highly associated with sustainability. The
multinational behind Dabur red, Chyawanprash is still a huge polluter," according to the report.
According to a report released in 2019 by Break Free from Plastics, a global coalition of NGOs,
Dabur is also one of the manufacturers of plastics contaminating the earth.

Strategy: Dabur has become highly sustainable organization after a number of issues. They took
lot of efforts to be sustainable in nature like
By 2025, all of our plastic packaging will be reusable, recyclable, or compostable. Collect and
process more plastic packaging than we sell, with the support of Ellen MacArthur Foundation.
Collaborating with governments, industry partners, suppliers, and consumers to increase
awareness and discover solutions to strengthen the plastics recycling infrastructure
Sales drop during pandemic due to poor supply chain (India)

Dabur Consumer Care, a subsidiary of Dabur India that produces health food drinks, saw its profit
dip by 46.3 percent to Tk 53.9 crore in 2020, despite a surge in nutrition awareness among
consumers looking for ways to boost their bodies' immunity. The drop in earnings, according to the
corporation, was attributable to fewer sales caused by a raw material supply shortfall caused by the
epidemic, which had halted cross-border mobility.

Strategy:
Dabur has formulated contingency plans during pandemic to quickly source alternative essential
material suppliers, transfer or share production between manufacturing locations, and employ
substitute components. Trends are tracked and modelled on a regular basis, and they are factored
into our forecasting process.
Dabur have policies and processes in place to protect personnel and the products in facilities, as
well as to cope with major incidents such as business continuity and disaster recovery.
Forward buying of traded commodities and other hedging strategies are used to actively control
commodity price risk.
References:

• Blue ocean strategy of DABUR INDIA. Essay48. (n.d.).,

https://www.essay48.com/case/38086-Dabur-India-Blue-Ocean-Strategy.
• Dabur - world's LEADING Ayurveda Company. Best Ayurvedic Company. (n.d.).,
https://www.dabur.com/.