Group 4 - Assignment 5 PDF

 

Strategic Analysis on Prepared by

marico Prepared for

Sheikh Morsh Morshed ed Jahan Professor Institute of Business Administration Administration University of Dhaka

Ishfa Is hfaque queW Wase aseek ek (49 (49D D - 34) Mehedi Has Mehedi Hasan an Niloy Niloy (55 (55E E – 05) S.M. Fahim Fahim Hoss Hossain ain (59E – 35) Md. Tamsi amsidd Iram Khan (59D (59D – 46) Sharmil Sha rmilii Rowsh wshon on Kab Kabir ir (59 (59E E – 53) Abid Ab id Ri Rifa fatt Mo Mogh ghul ul (60 (60D D - 28 28)) Ferrdou Fe douss Jaha ahann Ima (61 (61D D – 07) Fatima Nafsia NafsiaT Taslim (61D – 14) A. K. Atique Atique (61D -38) Irfa Ir fann Ahnaf Ahnaf (61 (61D D – 29) G. M. Asif Ahmed (61D (61D – 54) Khaledd Atifi Khale Atifi (61D – 55)

 

Marico Bangladesh Limited (MBL), a subsidiary of Marico Limited India, was incorporated in September 1999 and started its commercial operation in i n January 2000. Some of the flagship brand names are Parac Parachute, hute, Parachute Advansed Beliphool, Beliph ool, Nihar Natu Natural ral Shantii Bad Shant Badam am Amla, HairCode Powder Powder,, Set W Wet et Deodorant Deodo rant,, Medikar Plus, Parachute Parac hute Adva Advansed nsed Body Lotion, Lotio n, Saffo Saffola la Acti Active ve etc In the 2019-20 financial year, Marico Bangladesh's revenue soared 11.7 per cent to Tk 979.59 cror crore, e, and P Parachute arachute Coco Coconut nut Oil alone raked in Tk 636.30 crore, up 5.11 per cent year-on-year. Current market share 74.3%

About Marico Amongst the top 3 FMCG MNCs in Bangladesh Manufacturess and markets 17 branded FMCG products in the Manufacture category of Branded Coconut Oil, V Value alue Added Hair Oil (V (VAHO), AHO), Hair Dye, Hair Serum, Male Grooming Product (Deo), Shampoo, Edible oil & food, Skin Care and Body Lotion. Marico Bangladesh Limited (MBL), a subsidiary of Marico Limited IndMarico's IndMarico's value-added hair oil sales surged 25.23 per cent to Tk 262.34 and registered 5-yr CAGR of 18.81%. VAHO VAHO portfolio includes - Parac Parachute hute Advansed Adv ansed Beliph Beliphool, ool, N Nihar ihar Natu Naturals rals Shan Shanti ti Bad Badam am Amla, Parachute Parac hute Advansed Extra Care, Parachu Parachute te Advansed Ayurvedic Gold, P Parachute arachute Advansed Enriched Hair O Oil, il, Parachute Parac hute Adv ansedMarket Coolingshare HairisOil and Hair & Care Fruit Oils.Advansed Current 18%

GM Asif Ahmed 54 61D  

Raw material network

Strategies regarding Global Value Value Chain Intermediary goo goodd netw network ork

Main Raw Material: Copra (Dried coconut kernel). Oil percentage=60% of the dry weight of copra Mainly procured from India and some other raw materials are imported from Indonesia, Sri Lanka and Philippines

Copra meal. It can be used as livestock feed. Apparent Apparently ly Marico disposed all of the copra meal

In FY-2019, Marico imported 242756 Metric Tons of Copra. Copra accounts for 86% of total raw Material imports of Marico Plastic bottles are sourced from local vendors and flip top caps, perfume additives are sourced from IFFCO, Givaudan, Givaudan, Pen Century and Marico Limited (the parent company)

Around 93 of total costs costs of goods sold sold are are account accounted ed for consumed materials of which 82 are imported.

Production network Production capacity Coconut oil=20,500 KL (Kilo liter) Vaho (V (Value alue added hair oil) =10,200 KL Two Factories Factories in Gazipur & Dhaka The Company has decided to invest BDT 294 million from the availab available le funds to expand the capacity at its factory locations at Mouchak •

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and Shirirchala. Distribution Depot: Dhaka, Chittagong, Bogra and Jessor Jessoree GM Asif Ahmed-54-61D

 

Strategies regarding Global Value Value Chain : Marketing Network Thee com omppan anyy touche uchess the Distri Dis tribut bution ion Networ Network: k: Th

Channel Redef Redefinition inition

lives of 1 out of every 2 Bangladeshis through a

We have have appl applie iedd sh shop oppe perr mar marketi keting ng and and beha behavi vior or insi insigh ghts ts to

s843 tron,000 g 0doutlets istriets butthrough ionoughout netout worthe k tcountry hat try reaches about 843,00 outl thr coun

rede re def fin ine e ou our r ou outl et ha hann nnel elssategi wegies hich hies ch acros ba basi sica call y our pa pave ved d annels the the els. way buildi bui lding ng chann channel eltlet specif speccific ic str strat ac ross s lly all chann ch . for Emerging Emer ging Chann Channels els

The The Comp Compan anyy ha hass begu begunn expl plor orin ingg emerging channels including ecomme com merc rcee and ch chemi emist st ch chan annel nelss both both of which are projected to grow exponentially and in FY 16-17 we have have been been able able to gr groow ou ourr volum olumee in the these se chann channel elss by 77% 77%

Amar Doka okan - 8k outlets

were brought under this prog ogrram to showcase MBL pexecution. roducts with benchmark

Alternate Alterna te Strat Strategy: egy:

Since Februar y 2018, the price of copra has fallen by 42.9 42.9%. %. Accor Accordi ding ng to World orld bank Commo ommoddity Mark arkets Outl utlook ook 201 2018, Cop Copra pric pricee

Th Thee Compa mpany iden enttified ne new w engi ngines to fuel ou ourr gro growth am ambi biti tion onss and cr craf afte tedd a ro robbust ust Go-T Go-Too-Ma Mark rket et Di Diag agno nosi siss

team ensure ured out outstan andding resul esultts in incclud ludin ingg 49% coverag rage incr increa easse in 4 towns, ns,

is expec ecte tedd to remain main soft in the upcoming next three years. Marico’s inventory cost is on the rise (1707 Milli lioon BDT in FY 2019). We expect Marico to

incorp incorpor orat atin ingg RRevenue outee-to to-M -Mar arke ket, t,ent Sales Saland es Sales Capabi Capsabili lity ty, , Part artner ner Mana Managem gement, ent, evout enue Managem Mana gement Sale Automat Aut omation. ion.

Wh Whol esal ale Co Cove vera ge Expa Ex nsio ionnservic 2.5 2. timess and and reac reachh in 9000 90oles 00+ +eout outle lets tsrage under und er pans di dire rect ct serby vice. e.5 time

recon econsi side derr thei theirr “Importonly” Strategy in Copra

Stren Strength gtheni ening ng Found Foundat ation ion of our GTM jou journe rneyy

Sal Sales es Transf ransforma ormati tion on

 

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sour sourci cing ng and set set up any any loca locall pla plant nt instea instead. d.

Winning Winning through consumers Activating Activ ating Nandidni

Parachute Parac hute Advansed: Advansed: Ek Din Din Por Por TVC

In FY’17, Para arachu chute te Advan Advansed sed Beliphoo Beliphooll conduct conducted ed the on-ground on-ground act activ ivati ation on Na Nand ndin inii to br brin ingg the the br bran andd cl clos oser er to it itss co cons nsum umer ers. s. The Nand Nandin inii Acti Activvatio ationn enha enhanc nced ed br bran andd aw awar aren enes esss by more more than than 20% 20% in th thee targ target et segm segmen ents ts..

Th Thee obje object ctiive of this his comm commun unic icat atio ionn was to dri drive cons consum umpt ptio ionn of Coco Coconu nutt Oi Oill and and bu buil ildd long long te term rm equi equity ty of the the bran brand. d.

 

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Fatima Nafsia Taslim 14 61D  

TTF Analysis of Marico Bangladesh Limited Inner triangle (firm level factors) Capacity:

Culture:

(i) expanded sales capacity in 2019-20 (ii)PCNO production capacity 36,500 KL

(i) they wish to drive ex excellence cellence in culture (i) dev developin elopingg the their ir hu human man capital capital is importa important nt ttoo the them m (ii) empowering work culture (iii)Suagata Gupta, chairman, attributes (ii) financial capital is the monetary resources they have success to entrepreneurial culture (iv) Diversification: New Product Launch (BDT 980 crore revenue according to latest annual report) (iii) they manage manufacturing capital to provide value to customers

Capital:

Second triangle (industry level factors) Customers:

Collaborators:

Competitors:

(i) TG TG of parachute is the urban market (ii) TG TG also incorporates semi urban market (iii) marketed as somewhat premium

Retail outlets Nationwide Distributors MT & Ecommerce Platforms Top Local & Global Agencies: Bitopi, Asiatic,

Players in the hair oil market of Bangladesh also inclu include de (i) Ju Juii (Squa (Square) re) (ii) Kumarika (iii) Emami Limite Limitedd (iv) Dabur

Taproot

Irfan Ahnaf, Batch MBA 61D, Roll 29

 

TTF Analysis of Marico Bangladesh Limited Outer Triangle (macro level factors)

Country Context: (i)one of the top players in hair oil market

Creative contest:

(ii) FMCG Industry Steady Growth Gro wth in in last Decade (Annunall (Ann unallyy 10-1 10-15%) 5%) (iii) Publicly Listed Company. Share Price Performing well

…” –  (ii) “Innovation has product been ourinnov credoation Saugata Gupta (iii) innovation has been one of their financial foc focus us

(i) inn innoova vatio tionn is a cor coree vvalue alue of Maric Maricoo

Strategic Implication •

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Bangladeshi people might be hesitant to purchase due to Indian origins If the entire manufacturing process was done in Bangladesh and more Bangladeshi representation in senior management and this is highlighted This will cater to nationalism of the people People might be more willing to invest

Cross-border Context: (i) Indian company (ii) also operates in South Africa, Egypt, Malaysia etc.

Irfan Ahnaf, Batch MBA 61D, Roll 29  

SWOT T Analysis of Marico Bangladesh Limited SWO Strengths

Weaknesses



Strong management and skilled workforce  Brand image and product differentiation  Targeting both urban and sub-urban customers  Strong distribution network- 843,000+

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Cost cutting in many activities  Copra: the key raw material material in for 60% of the portfolio  Limited decision taking capacity: regulation of agricultural marketing company limited

retail stores Established brands

 

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pportunities 

Expanding FMCG consumer market market of

Bangladesh Introduction of wide range of product portfolio (e.g. for rural customers)  Can take advantage advantage of established distribution network for new brands  Global expansion 

High Dependency on hair Oil Lack of required capital

Threats 

Foreign competitors (e.g. Emami, Kumarika,

Vatika) Coconut-oil Market Saturated  Local and global sourcing of raw materials

49D_34_Ishfaque Waseek  

PORTER’S 5 FORCES THREAT OF NEW ENTRY

POWER OF SUPPLIERS

RIVALRY BETWEEN COMPETITORS

THREAT OF THREAT SUBSTITUTES

POWER OF BUYERS

61D-55-Khaled Atifi  

RIVALRY BETWEEN COMPETITORS

Limited number of pla players yers

Industry gro g rowth wth

Exit barriers

61D-55-Khaled Atifi  

RIVALRY BETWEEN COMPETITORS

Differentiation

Focus on implicit needs and expectations

Raise switching cost

Develop long term relationship

Identify new customer segment

R&D

Risk reduction

Collaborate

61D-55-Khaled Atifi  

Threat of New Entran Entrants ts LOW LO W Factors

Intensity (entry Threat to to market)

Reason

Presence of regulations for the entry of new players

Unfavorable

60.31 60.31% % Tax to import

Consumers brand loyalty

Low

Top Product Quality, ranks 1st in India in coconut oil

Requirement of high initial capital

Low

Cross over ex existing method, innovation of product

Channel of distribution (Relation with the suppliers)

Complex

Loyal existing suppliers

Abid Ali Moghul (6 (60D 0D 28) 28)  

Threat of Substi Substitutes tutes Moderate

Non-sticky and grease-free

Combination of coconut oil and methi Makes your hair thick and healthy

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Visible Visib le reduction to hair-fall Provides Pro vides extra nourishment

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Make hair super shinny and silky

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Mild and pleasing coconut smell

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Good for headache

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Antibacterial properties

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Very Expensive

Jojoba Oil •

Much lighter than coconut oil

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Not much available

Babasau Oil

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Avocado Oil

able to penetrate the shaft of the hair and moisturize Not much available

Abid Ali Moghul (60D-28) (60D-28)  

Bargaining power of buyers: High

• Comparable

• Low

Strategic Implication: 

• Low

Product differentiation

Performance of substitutes

Switching Switc hing cost

Availability similar of alternatives

 

Aggressive marketing strategies Differentiation Brand loyalty and value

• High

Ferdous Ferdous Jahan

Batch: 61D ID: 07  

Bargaining power of suppliers: Low

• High

• Likely

• Low

In-house production

Control on price

Differentiation of input

Number of Number suppliers

• High

Ferdous Ferdous Jahan Jahan Batch: 61D ID: 07

 

Well equipped IT infrastructure

Virtual irt ual platform for work from home Awards for best global prac Awards practices tices in excellence in business intelligence Big data & AI usage for digital marketing

61D-38-A. K. Abdullah Al Atique

 

S.M. Fahim Hossain-59E-35

Strategic Strateg ic Group Group MappingMapping- Parachute arachute High

(Light Hair Oil)

Parachute Beliphpool Beliphp ool & Parachute Aloe Vera

Cute Hair Oil

n m g S  

Medium (Anti Hairfall Hairfall Oil)

Dabur Vatika

Emam Emami i 7 Oil Oil Kumarika

Parachute Extra Care

c P Parachute Coconut  Jui Coconut Oil

Low

Oil

(Pure Coconut Oil)

Few Key Outlets

Urban Focused

Across Country

MT & Ecom

Urban & Semi Urban Market

Urban + Rural Market

Distribution  

PORTER’S GENERIC STRATEGIES

Focused Differentiation

Broad Differentiation •

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Product categories- Parac Parachute, hute, Parac Parachute hute Beliphool, Parachute Aloevera Differentiated Differ entiated based on o n “Strength & ”

Nourishment

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Caters to broad customer group of vast vast demographics and across the country Priced slightly higher than local competitors for the

Product categories- Parachute Parachute Extra Care, Livon Livon Hair Serum Extra care focus on “Anti Hairfall” alongside strength and functional packaging designed to promote it’s use.

•

Livon Livon Serum focuses focuses on “De-tangling feature”

•

Both products only caters to small and specific group higher income range mostly mostly residingofinpeople urban in areas

superior differentiated value value slightly lower price thanand foreign competitor competitors s ofand similar offering offerings s •

Priced higher than local competitors.

59E- Roll 53 – Sha Sharmili rmili Rowsh wshon on Kab Kabir ir  

RED OCEAN STRATEGY 65% of MBL’s revenue comes from Parachute Coconut Oil. MBL holds roughly 82%-85% market share in Branded Coconut Oil category. MBL

holds the highest level of market share in this category for decades.

Red Ocean Defensive Strategies

Protecting market position, creating walls around weak areas • Consumer led Innovation: Keeping consumer as the focus and a partner in creating and delivering solutions. TVCs focusing on the message “ আমার মজবু ত চ      েলর গ ” • Trade Marketing Initiative : MBL has a signature trade loyalty program “Amar Dokan” which help the Company to maintain main tain its growth trend. • Geography led initiatives address localized needs for supporting the brands of the Company. Introduced ‘Parachut Parachutee Tuni Tuni ’ to ensure penetration in

rural areas.

Signaling retaliation • 40 ml free with 200 ml bottle • Delivering message to use within 1 day interval to get best result.

Strategic :Implication To To be more consumer centric and try to increase volume ggro rowth wth usage.

55E- Roll 05 – Mehed Mehedii Hasan Nilo Niloyy  

BLUE OCEAN STRATEGY

Livvon Ha Li Hair ir Se Serum rum

Parachute Extra Care

Product Differentiation:

Advanced hair oil with combing applicator. Therapeutic hair care product.

Product Differentiation:

Hair Serum. Not a shampoo, nor a hair oil.

Creating and capturing new demand:

Targets urban/semi urban women who needs a quick fox for their hair. Customers who have less time for hair care due to busier lifestyle. Uncontested Market Space:

Extensive focus of research and product innovation. Instead of fighting in the hair care segment with generic products (Shampoos, conditioners, oil) it developed a unique product.

Creating and capturing new demand:

Targets urban/semi urban women who uses different hair styling methods. Customers who have hair damage Uncontested Market Space:

Extensive focus on product feature and application. Instead of fighting in multiple segments, it offers a “Super hair care product”. Competition:

Competition:

The innovative, faster application method differentiates this

Still there is no product to rival Livon Hair Serum in the market.

product yet at the medium price range But despite claims from Marico that this is more than a Hair oil rather a therapeutic, this product might still face some competition from other products.,

59D-46 59D -46--- Md. T Tamsi amsidd Iram Iram Khan  

Sources include: •

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One of the group members – S. M. Fahim Hossain  – is a Senior Brand Manager at Marico Bangladesh Limited. He was consulted whilst preparing this report. Content was taken from Marico’s websites. A lot of information is available there, there, including annual reports as Marico is a Public Limited company in Bangladesh. Content was taken from https://www ps://www.mordor .mordorintelligence.com/industry-reports/bangladesh-hair-oil-market intelligence.com/industry-reports/bangladesh-hair-oil-market.. Images and/or icons were downloaded from the internet. Information was taken from relevant relevant sites online. Some, but not all, of the sources are mentioned in relevant slides. This report was based solely on secondary information. i nformation. Work was divided among members into 3 sub-groups and then further divided individually. Each member is responsible for his/her task. https://www.academia.edu/38821503/_Marketi https://www.academia.edu/3882150 3/_Marketing_Plan_of_Parachute_Hair_Oil_Focusing_on_Consumer_Beha vior_  https://marico.com/investorspdf/MARIC https://marico.com/investorspdf/MARICO_AR_2017 O_AR_2017 _final_ar.p  _final_ar.pdf  df