MGT 341 – COMPETITIVE STRATEGY

SECTION – 2
GROUP: BREAKOUT ROOM 4
PORTER’S 5 FORCE ANALYSIS: TATA SALT

Name Enrolment Number

Mayank Banthia AU1910067

Priyanshu Sharma AU1910580

Janhvi Lalwani AU1910466

Badal Jain AU1910140

Yash Shrimal AU1910078

Vibhas Sekhani AU2010188

Lakshman Kapuganti AU1910249

Group Working
After getting the topic, we first formed a WhatsApp group to discuss everything over text and then
had a zoom meeting the next day in order to discuss how to go about the two tasks, i.e. the case
summarization and the porter’s analysis. We decided that it would be best if everyone did the
porter’s analysis together while we were on zoom itself, so, we found a common slot for the next
day, i.e. 22-01-2022. While on zoom, everyone researched everything and collected as many facts
and information as possible so that the analysis could be on point. After gathering all the facts,
everyone created a word document wherein they sent out all the information which they had
collected, on the group.
Mayank and Priyanshu then compiled all the work over another zoom meeting and framed the
information and facts according to the porter’s 5 forces. It was also decided that they would be the
ones to present during the lecture.
Launched in 1983 by Tata Chemicals, Tata Salt was India’s first packaged salt brand in India.
Currently, this brand is the biggest packaged salt brand in India, with a market share of around
17%. Additionally, India is currently the third largest Salt producing Country in the World, with
annual production being around 230 million tonnes.

Porter’s five forces –

1. Threat of new entrants – The salt industry has moderate to high barriers to entry, the
reason being that this industry is regulated by government policies and institutions which
offer tough entrance based on their criteria.
However, the major reason why new companies avoid getting into the salt industry is due
to the brand image of existing companies, such as tata salt. These existing players have a
larger size of operations, and also have sustainable economies of scale into their business
processes.

2. Threats of Substitutes – The threat of substitution is fairly low in the salt industry, owing
to the smaller number of substitutes available such as garlic, lemon, onion powder, etc.

3. Industry rivalry - Tata salt faces moderate to high industry competition. The players vary
in their size of operations but compete for the same share of the pie with respect to
consumer segments.
As mentioned earlier, tata salt is biggest packaged salt and holds 17% of market share. The
higher competitive rivalry has therefore led to an overall growth of the salt industry, and
fueled internal development of companies as well. The major competitors of tata salt are
‘Ankur Salt’, ‘Nirma Shudh Salt’, ‘Ashirwad Salt’, etc.

4. Supplier bargaining power – Tata salt has a limited number of suppliers from local and
international markets. The lower number of suppliers makes switching costs high for the
business, and as a result, give more power to the suppliers because of the higher demand
they face. The number of suppliers is low because of the quality checks and contractual
agreements tata salt carries out. This can be explained through “asset specificity”, wherein
the buyers and suppliers are interdependent as the seller sells the product which that buyer
needs and the buyer only wants the product which that seller is selling.
(In general, however, the number of suppliers is high in this industry; according to data
over 12,000 suppliers)

5. Bargaining power of Buyers – The bargaining power of buyers of tata salt is somewhere
in the middle, neither too high nor too low. This is because there are a large number of
sellers providing packaged salt, as mentioned earlier. We also see that the prices of salt
remain fairly low and stable throughout the year, which is because if a company decides to
increase prices, the buyer has the option to change the brand it purchases. Also, there is no
shortage of salt in India because of which the prices need to be increased.