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    Growth Strategy Of: Ayushi Sharma Lalit Khatri Shreya Sharma

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    lalit khatri
    Dabur has pursued a strategy of growing through both organic and inorganic means, enhancing its portfolio across categories. However, some analysts argue this spreads Dabur too thin, preventing it from scaling any single brand significantly. While Dabur's diversification strategy has fueled steady growth, it risks being unable to compete against larger rivals in an increasingly consolidated market. The case recommends Dabur focus on penetrating key categories and building a few champion brands to allow sustainable margins, rather than dispersing efforts across many small brands.

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    Growth Strategy Of: Ayushi Sharma Lalit Khatri Shreya Sharma

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    lalit khatri
    105 views18 pages
    Dabur has pursued a strategy of growing through both organic and inorganic means, enhancing its portfolio across categories. However, some analysts argue this spreads Dabur too thin, preventing it from scaling any single brand significantly. While Dabur's diversification strategy has fueled steady growth, it risks being unable to compete against larger rivals in an increasingly consolidated market. The case recommends Dabur focus on penetrating key categories and building a few champion brands to allow sustainable margins, rather than dispersing efforts across many small brands.

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    Final on Dabur

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    Dabur has pursued a strategy of growing through both organic and inorganic means, enhancing its portfolio across categories. However, some analysts argue this spreads Dabur too thin, preventing it from scaling any single brand significantly. While Dabur's diversification strategy has fueled steady growth, it risks being unable to compete against larger rivals in an increasingly consolidated market. The case recommends Dabur focus on penetrating key categories and building a few champion brands to allow sustainable margins, rather than dispersing efforts across many small brands.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    105 views18 pages

    Growth Strategy Of: Ayushi Sharma Lalit Khatri Shreya Sharma

    Uploaded by

    lalit khatri
    Dabur has pursued a strategy of growing through both organic and inorganic means, enhancing its portfolio across categories. However, some analysts argue this spreads Dabur too thin, preventing it from scaling any single brand significantly. While Dabur's diversification strategy has fueled steady growth, it risks being unable to compete against larger rivals in an increasingly consolidated market. The case recommends Dabur focus on penetrating key categories and building a few champion brands to allow sustainable margins, rather than dispersing efforts across many small brands.

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    of 18

    GROWTH STRATEGY OF

    AYUSHI SHARMA
    LALIT KHATRI
    SHREYA SHARMA
    Highlights

    Introdu
    Introdu Analysi recom
    ction
    ction of s of the menda
    of the
    Dabur case tions
    case
    DABUR
    1884   Birth of Dabur
    1896 Setting up a manufacturing plant
    1900s Ayurvedic medicines
    1919 Establishment of research laboratories
    1920 Expands further
    1936 Dabur India (Dr. S.K. Burman) Pvt. Ltd.
    1972 Shift to Delhi
    1979 Sahibabad factory / Dabur Research Foundation
    1986 Public Limited Company
    1992 Joint venture with Agrolimen of Spain
    1993 Cancer treatment
    1994 Public issues
    1995 Joint Ventures
    Conti..
    1996 3 separate divisions
    1997 Foods Division / Project STARS
    1998 Professionals to manage the Company
    2000 Turnover of Rs.1,000 crores
    2003 Dabur demerges Pharma Business
    2005 Dabur aquires Balsara
    2005 Dabur announces Bonus after 12 years
    2006 Dabur crosses $2 Bin market Cap, adopts US GAAP
    2006 Approves FCCB/GDR/ADR up to $200 million
    2007 Celebrating 10 years of Real
    2007 Foray into organised retail
    2007 Dabur Foods Merged With Dabur India
    2008  Acquires Fem Care Pharma
    2009  Dabur Red Toothpaste joins 'Billion Rupee Brand' club
    •  
    History of Dabur
    • Dabur India Ltd. (Dabur), a leading Indian fast moving
    consumer goods (FMCG) company, was established in
    1884 as a small pharmacy based in Calcutta (now Kolkata).
    Since then, it had gone on to become a Rs. 22 billion
    company (as of 2007). Its product range included
    Toothpastes and Toothpowder (Dabur Red and Lal Dant
    Manjan), Hair Oils (Vatika), Shampoos (Vatika) , Digestives
    (Hajmola), Fruit Juices (Real), Nature Care Isabgol,
    Medicated Oils, Ayurvedic products (such as Churnas, Asav
    Arishtas, Ras Rasaynas, and Chyawanprash), and Honey.

    • It had two major strategic business units - Consumer Care


    Division and Consumer Health Division. Its products were
    produced in 13 manufacturing locations in Nepal, Nigeria,
    Egypt, Dubai, and Bangladesh and it products were sold in
    more than 50 countries.
    Snap shot of Dabur
     Leading consumer goods company in India with a turnover of Rs. 2834.11
    Crore (FY09)
     3 major strategic business units (SBU) - Consumer Care Division (CCD),
    Consumer Health Division (CHD) and International Business Division (IBD)
     3 Subsidiary Group companies - Dabur International, Fem Care Pharma
    and newu and 8 step down subsidiaries: Dabur Nepal Pvt Ltd (Nepal),
    Dabur Egypt Ltd (Egypt), Asian Consumer Care (Bangladesh), Asian
    Consumer Care (Pakistan), African Consumer Care (Nigeria), Naturelle LLC
    (Ras Al Khaimah-UAE), Weikfield International (UAE) and Jaquline Inc.
    (USA).
     17 ultra-modern manufacturing units spread around the globe
     Products marketed in over 60 countries
     Wide and deep market penetration with 50 C&F agents, more than 5000
    distributors and over 2.8 million retail outlets all over India
    "Dedicated to This is our They all are People are
    the health company. We leaders in our our most
    and well being accept area of important
    responsibility,
    of every personal with a deep
    asset. We add
    household" responsibility, commitment to value through
    and deliver results. result driven
    accountability We are training, and
    to meet determined to we encourage
    business be the best at & reward
    needs. doing what excellence.
    matters most.
    They have They work Continuous They are
    superior together on the innovation in committed to
    principle of the achievement
    understanding mutual trust &
    products &
    of business
    of consumer transparency in a processes is success with
    needs and boundary-less the basis of integrity. We are
    develop organisation. We our success. honest with
    products to are intellectually
    consumers, with
    honest in
    fulfill them business
    advocating
    better. proposals,
    partners and
    including with each other.
    recognizing risks.
    Introduction to case
    A finger in many pies

    • The company had adopted a combination of the organic and


    inorganic routes in fueling its growth.

    • Further, it enhanced its product portfolio in the various product


    categories. For instance, Homemade cooking pastes like ginger,
    garlic, tomato puree, etc. were added to the food business. 

    • On the inorganic growth front, the company acquired the Balsara


    group of companies in 2005. This acquisition gave Dabur new
    brands in toothpaste (Promise, Babool, and Meswak), mosquito
    repellants (Odomos), toilet cleaners (Sani Fresh), and air
    freshners (Odonil). . 
    Conti…
    • In fact, the Rs 1,852-crore (Rs 18.52 billion) company has a presence in
    categories ranging from mosquito repellents and juices to face packs and
    honey, some acquired and some developed in-house. Trouble is, not one of
    these categories contributes more than 21 per cent to the company's
    revenues.

    • Still, Dabur has been growing at a lively 17 per cent over the past three years.
    Which raises an interesting strategy question: is there a right way to grow?
    What is better: a few power brands that are nurtured to offer huge returns, or a
    wide array of products all of which contribute meager sums that, nevertheless,
    add up to a reasonably good total?

    • There is a school of thought that believes Dabur's choice may not be the best
    way of ensuring future growth: too many segments will constrain it from scaling
    up significantly to match increasing competition and that will bring down overall
    pace of growth. Hear some analyst
    Conti…
    • Dabur isn't the category leader in any of the consumer
    product categories where it has a presence: it is No. 4 in
    shampoos, No. 3 in toothpastes and nowhere in the reckoning
    in toilet soaps. But that doesn't appear to bother the
    company overmuch -- it is too busy launching new products

    • In the past two years, there have been five launches under
    the Dabur umbrella and two under Vatika. And that doesn't
    include the eight brands the company gained when it
    acquired Balsara in 2005
    Growth strategy by Dabur
    • Focus on growing our 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 our target consumers with safe, efficacious, natural solutions
    by synthesizing our deep knowledge of ayurveda and herbs with
    modern science
    • Provide our consumers with innovative products within easy reach
    • Build a platform to enable Dabur to become a global ayurvedic leader
    • 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
    Dabur say’s
    • "We want to be in as many categories as possible, as long
    as they offer a herbal platform, even if our share is small."
    • “the strategy for a new brand launch is simple: by the
    third year, a new brand must contribute to common
    overheads and by the fifth year, it should make "some
    profit". "I don't intend to be the market leader. It's enough
    that I'm growing faster than the market," he adds”.
    • "We are consciously entering only those categories that
    offer a platform for herbal products. That is why we have
    forayed into personal wash but will stay away from
    laundry,"
    Analysis

    When a banyan tree's


    branches hit the ground,
    they start acting as roots, too
    • In Dabur's case, though, the banyan tree
    stands for what has not been achieved. The
    company has been branching out -- it has
    seven brands in the oral care category, nine in
    the hair care space and six brands in foods.
    • Competition from larger players such as
    Hindustan Lever (HLL) and Procter & Gamble is
    increasing,"
    • "It will  not be easy  for Dabur to grow its
    share, even though the category is
    underpenetrated.". Even traditionally higher-
    margin categories, such as foods, are now
    likely to be under threat as large retailers
    • One way of scaling up could be through the
    inorganic route
    recommendations
    • More focus on penetration should be laid.
    • It is probably better for a company to create a few
    champion brands rather than dissipate its energies on
    too many products, because that is what will result in
    sustainable margins
    • It is difficult to scale up organically these days because
    brands are constantly being upstaged. Now, if companies
    don't scale up, margins are going to be under pressure.
    • The company should discard products where volumes
    aren't growing fast enough to deliver margins

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