SWOT Analysis of the Detergent Powder Surf Excel

SWOT Analysis of the detergent powder Surf Excel (a famous product and famous brand of Hindustan Unilever Limited.)

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Index

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Page No

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About the product

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About the company

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SWOT Analysis

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3.1

Strengths

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3.2

Weakness

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3.3

Opportunities

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3.4

Threats

18

4

2

Particulars

Conclusion

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About the product Surf Excel, launched in 1954, is one of the oldest detergent powders in India. Initially, the brand was positioned on the clean proposition of “washes whitest”. However, with the emergence of numerous local detergent manufacturers and the entry of other global brands, Surf Excel underwent various changes in its Brand Communication; from 'lalitaji' to 'dhoondte reh jaaoge' to 'jaise bhi daag ho, surf excel hai na', and is today communicated on the platform of 'Dhaag achcha hai'. This is in line with the global communication platform of Dirt Is Good, which is a communication strategy of Unilever for its premium detergent products, sold under various brand names; such as Omo in Brazil and Persil in UK and France. Today, Surf Excel leads the Premium Fabric Wash Category in India. Some of the other major detergent products of Unilever in India are Rin and Wheel. The latest entry into the segment is Comfort, a Fabric Conditioner. th

HLL On 18 May 2003 has introduced an innovative low foam detergent. The New Surf Excel has been specially developed with technology to conserve water, making it the first of its kind in the country. The innovation keeps in mind the current water scarcity scenario in India.

About the product and the different varieties of Surf Excel are explained the following pages.

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About the company




Mission

Unilever’s mission is to add Vitality to life. We meet everyday needs for nutrition; hygiene and personal care with brands that help people feel good, look good and get more out of life.




Local roots and global scale

Our deep roots in local cultures and markets around the world give us our strong relationship with customers and are the foundation for our future growth. We will bring our wealth of knowledge and international expertise to the service of local consumers – a truly multi-local multinational.




Our people

Our long term success requires a total commitment to exceptional standards of performance and productivity, to working together effectively, to a willingness to embrace new ideas and learn continuously.




Corporate responsibility

To succeed also requires, we believe, the highest standards of corporate behavior towards everyone we work with, the communities we touch, and the environment on which we have an impact.




Value creation

This is our road to sustainable, profitable growth, creating long-term value for our shareholders, our people, and our business partners.




Legal Structure

Unilever operates as a single business entity. NV and PLC are the two parent companies of the Unilever Group, having separate legal identities and separate stock exchange listings for their shares. To ensure unity of governance and management, they have the same Directors and are linked by agreements. The Equalization Agreement regulates the mutual rights of the two sets of shareholders, including dividends. There is a one-for-one equivalence between the shares.




Management

Categories President is responsible for Category strategies, brand development and innovation. Regional Presidents are responsible for managing the business, deploying brands and innovations effectively and winning with customers. They are supported by the Finance and HR functions.

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Strategy

We aim to build a winning portfolio by extending our leadership positions and our presence in high growth spaces. We are improving our core capabilities Bringing all this together as ‘One Unilever’ will ensure that we capitalize on both our local roots and global scale.




2007 Results at a glance

Turnover grew by 1.4% Underlying sales growth of 5.5%. Operating margin 13.1% with an underlying improvement of 0.2 percentage points. Operating profit for the year was 3% lower, due to a higher net charge for restructuring, disposals and one-off items. Net profit from continuing operations grew by 10%. Strong cost savings programmes delivered €1 billion in the year.




Present year Vs Previous year Amt’s in INR 000’000




Particulars

Sept 08

2007

Turnover

1,203,748

1,003,035

Net Profit

148,673

123,403

Share listings, EPS and Dividends

Unilever normally pays two dividends per year: an interim dividend set at 35% of the previous year’s total dividend, and a final dividend paid after the AGM. Dividends are equalized between NV and PLC. The small difference in New York is due to currency movements.

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Products of the company

Personal Wash - Lux, Lifeboy, Liril, Hamam, Breeze, Dove, Pears& Rexona Laundry

- Surf Excel, Rin & Wheel

Skin Care

- Fair & Lovely, Pond’s, Vaseline & Aviance

Hair Care

- Sunsilk Natural & Clinic

Oral Care

- Pepsodent & Closeup

Deodorants

- Axe & Rexona

Colour Cosmetics – Lakme Health Care

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- Ayush

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SWOT Analysis

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Snap Shot Strengths

Weakness

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Strong Brand Portfolio

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Strong Competitors

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Price Quantity & Variety

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High Price of the product

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Solid base of the company

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Substitute Products

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Innovative Aspects

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Policy of Spending for the Social

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USP’s (Unique Selling Points)

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High Quality Manpower

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Financials of the company

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Reach of the products

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Lack of control in the markets

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Social Responsibility of the company.

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Lack Reliability of data, plan

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Competitive Advantages

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Success of the Slogan – Stains Are

Responsibility

predictability •

Lack of Competitive Strength

Good

Opportunities

Threats

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Changing life style of the people.

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Political effects

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New markets, vertical, horizontal

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Legislative Effect

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Increasing the volume of production

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Environmental effects

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Seasonal Weather & Fashion influences

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Economic Crisis

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Geographical Export & Import

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Change in the life style

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Niche Target Market

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Introduction of Local Products

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Business and product development

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Obstacles faced

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Technology Development & Innovations

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Increase in production and labour cost

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Applying tactics & surprise

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Chances of Price War

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S – Strengths 1) Strong Brand Portfolio Surf Excel is available in Indian markets for the last five decades. It has been getting sold successfully in more than 20 countries including Pakistan, Sri Lanka, and Bangladesh Etc. Surf Excel has got an excellent Brand Communication; with 'lalitaji', 'dhoondte reh jaaoge', 'jaise bhi daag ho, surf excel hai na', and is today communicated on the platform of 'Dhaag achcha hai'. These all helped to retain the Brand name in everyone’s mind.

2) Price Quantity & Variety The product is available in different quantities, and in different varieties. The varieties of the product are well described in the section of “About the Product”. The price and quantity of the products are as follows,

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2kg

1kg

500g

200g

210/-Rs

120/-Rs

65/-Rs

22/-Rs

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3) Solid base of the company HUL (Hindustan Unilever Limited) has a solid base all over the world. Some of the features of the company are listed below. People

- 174 000 Employees at the end of 2007

Nationalities

- 21 Nationalities among our top level group of 113 managers.

Contributions

- €89m Contributed to communities around the world in 2007.

Countries

- about 100 Countries in which we operate.

R&D

- €868m Invested in R&D world wide.

Environment

- over 1/3 Reduction in CO2 emissions from energy per tonne of product produced over

4) Innovative Aspects By time by time the Company has implemented different innovative aspects and have introduced different varieties of products in the markets. Some of the innovative steps taken by the company are as follows.


The company has introduced Surf Excel Blue, which can be used for Fabric and calour care.




The company has introduced Surf Excel Matic, a detergent powder designed specially for Washing Machines as it has a low lather formula.




Quick Wash is a product that saves up to 2 buckets of water introduced for a concept of reducing the water consumption.




Surf Excel Bar, which is a nil mineral detergent bar.

5) USP’s (Unique Selling Points) The following are the important USP’s of the company,


The detergent which is in the market for the last five decades,




Which is sold successfully in more than 20 countries.




Detergent which will reduce the water consumption.




The product of the company which is involved in lot of social responsibilities.

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6) High Quality Manpower The Company has got high quality Manpower which is playing a fabulous role in ensuring the growth of the company. The below are the short profile of the key personnel’s, Harish Manwani – Chairman. Mr. Manwani joined the Board of HUL in 1995, responsible for the Personal Products business. In addition, he held regional responsibility as the Category Leader for Personal Products for the then Central Asia and Middle East (CAME) Business Group. Nitin Paranjpe - CEO and Managing Director. Mr. Nitin Paranjpe joined the Company as a Management Trainee in 1987 after obtaining a degree in BE (Mech) and MBA in Marketing (JBIMS) from Mumbai. During 2001, he became the Personal Assistant to the Unilever Chairman in London. On his return to India in 2002, he became the Category Head – Fabric Wash & Regional Brand Director (Asia) for some Laundry and Household Cleaning (HHC) Brands. Mr. Paranjpe was appointed as the CEO and Managing Director of the Company in February 2008. D. Sundaram - Vice Chairman and CFO. He has joined Unilever in August 1996 as Senior Vice President – Finance Central Asia and Middle East Group with responsibility for Finance, IT and business strategies for Unilever companies in the Indian sub-continent, North Africa and the Middle East countries. Mr. Sundaram was elevated as Vice Chairman of the Company in April 2008. Gopal Vittal - Executive Director, Home & Personal Care. For 16 years he worked across both in India and Asia for Unilever, following which he was the Marketing Director at Bharti Airtel for a period of two years leading Marketing and Distribution strategy for the group. Effective 1st July 2008 he rejoined Hindustan Unilever Limited as the Executive Director for Home & Personal Care business. 7) Reach of the products As per the studies made in Indian Detergent market, HUL is holding a market share of 40% (detergent cakes + powder). In that Surf Excel is holding 10 to 12% of the total market. The distribution chain followed by HUL is, Manufacturer-> regional stockiest-> retailer-> customer. Hence it assures the reach of the product in all the Urban & Rural areas. 8) Social Responsibility of the company. HUL is involved in lot of Social and Cultural activities now a day. It will automatically increase the image of the company and subsequently it will help in increasing its Brand Image.

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9) Competitive Advantages The product has the following competitive advantages, •

Various varieties of the product.

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Price of the product

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Promotion & Advertising

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Marketing strategies of the company

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Effective and attractive Packaging

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Effective R&D towards the product

10) Success of the Slogan – Stains Are Good

The Slogan ‘’Stains Are Good’’ is playing a good role in getting the Publicity among the people for Surf Excel products. The company is conducting lot of Seminars and Cultural Activities with the Theme of ‘’Stains Are Good’’. It has helped a lot in increasing the Demand for the product.

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W - Weakness 1) Strong Competitors Surf Excel has lot of competitors in the market. The main competitors of Surf Excel are listed below; •

Tide Detergent

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Ariel Detergent

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Sun Laundry Detergent

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SA8 - Amway Detergent

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Wisk Laundry Detergent

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OxiClean Stain Remover

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Febreeze

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Rin Detergent Bar

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Downy Enhancer

2) High Price of the product While comparing with the other Detergents products in the market the price of the Surf Excel is very high. Infact some of the products (for Example Tide, Nirma etc...) are available in the half price of the surf Excel. 3) Substitute Products For Detergent Powders there are lots of substitute products available in the market. Like detergent cakes, liquid detergents etc. This will reduce the market demand for the detergent powders. 4)

Policy of Spending for Social Responsibility

The company spends a lot for Cultural & Other Activities in the public other than spending for product development and research activities. It may result in reducing the growth of the product and may the product will become outdated in the market.

5) Financials of the company As per the interim financials the company has obtained 20 % growth in the turnover comparing 14

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with the previous year. Even though the growth rate is high we should consider that in the current Competitive Market the expenses for Marketing & Advertisement will keeps on increasing even though the turnover is increasing. With this 20% growth in turnover the company may not be able allocate sufficient amount for Marketing & Advertisement. 6) Lack of control in the markets As we see the Distribution channel followed by the company is Manufacturer-> regional stockiest> retailer-> Customer. As per this it is clear that the Regional Stockiest is having all the powers of a Huge Region. If conflict arises between HUL & the Regional Stockiest may result in losing the whole region market for the product. 7) Lack Reliability of data, plan predictability Since the Market for the product is too large and it is spread over lot of countries, it is not possible to get the reliable data about the market, demand, and other data which will help in market development, planning. This will reduce the predictability power of the company. 8) Lack of Competitive Strength

The Surf Excel Products have the following defects which are reducing the Competitive Strength of the product.

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No deep knowledge about the local markets.

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Local Manufacturers are more known to the people

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High price of Surf Excel Products.

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No famous Brand Ambassadors are there for the company

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Lack of control in the supply chain of the product.

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O - Opportunities 1) Changing life style of the people. The Company can utilize the changing life style of the people for increasing the demand of the product. By concentrating on customer needs and by giving different kinds of detergents the company can widen the scope and can increase the demand of the Surf Excel brand products. 2) New markets, vertical, horizontal Even though the product reaches almost every markets there are lot of untouchable market areas for the product. It is possible to outsource the distribution channel and increase the reach of product in the countries. By outsourcing the distribution channel, the company can concentrate in product development. 3) Increasing the volume of production

The company can concentrate in increasing the volume of production and can try to acquire a high market share for the product. By increasing the production and market share it is possible to achieve high demand and a small reduction in price of the product. It will ensure customer satisfaction. 4) Seasonal Weather and Fashion influences

The fashion in our country is changing day by day. The seasonal weather also have a great influence in the fashion. By change in fashion change in cloth types also will occur automatically. Surf excel should be made effectively which will suit the changing cloth material and which will help the people to use the detergent accordingly with the changing fashion and seasonal weather. 5) Geographical Export & Import

It is possible to concentrate in achieving the new markets in inside country by exporting or importing the product. By this, the company can produce the product from the low cost countries and can sell the same in the high profit markets.

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6) Niche Target Market

Niche markets are the small market which the other companies are not concentrating very much. It is possible to explore the small market areas to market Surf Excel brand and try to achieve a monopoly like situation. By this the product can get more demand even without making any change in the price of the product. 7) Business and product development

The company can think about the business development and the product development of Surf Excel brands by and for exploiting the increasing population increasing consumption and other changes in the global market. 8)

Technology Development and Innovations

Technology Development’s can be introduced and experimented for decreasing the cost of production and for increasing the quality of the product. New innovations can be introduced for manufacturing the Surf Excel brands in environmental friendly which will increase the brand image of Surf Excel 9) Applying tactics and surprise in new products

The present market trend is introducing a new product with a different tactics. It is usally seen that a real effort is taken to attract the prospective customers and give them a new surprice while introducing a new product in the market. The Surf Excel can also follow this marketing tactics while introducing a new variety in the market and can get a sudden boost in the demand of the product at the time of introduction in the market.

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T – Threats 1) Political effects Since the margin of a CONSUMABLE PRODUCT is very law. A very minute change in the price also may effect in a terrific manner. If the government introduces any sort of changes in tax or if it introduces any new CES, it will not be possible for the company to sell out the products in the market. They will have no other way than to increase the price of the product. As because the price is already high, further increase in price will affect the product in a larger way. 2) Legislative Effect The chemicals used for the production of Detergents are harmful for the human body & natural environment. Indian government till today has not taken any steps to address these issues. If a mandatory legislation get introduced it will be really hard for the company to produce the product as per legislation and it will be hard to survive that. 3) Environmental effects Detergent contains chemicals that can be harmful the human being & natural resources. If the company does not work out something for making the product environmental friendly and produce the product with natural resources instead of chemicals in the coming years it will be hard for the company to sell out the products in a better way. 4) Economic Crisis We all know that the whole world is totally affected because of the sudden collapse in the banking sector in US. It has affected the countries all over the world. The people become very conservative in spending the money. In this like a situation in the coming years it will be hard for the company to retain the products which have a higher price. Even though it has high quality in the stage of economic crisis the people will look only in the price more than the quality. 5) Change in the life style The life style of the people; mainly working class people are changing day by day. Because of the concept of outsourcing, they have started giving the clothes for washing in the laundry shops and other shops. Some of the professional laundry shops are keeping there own chemicals for cleaning the clothes.

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6) Introduction of Local Products The local products are getting introduced in the detergent market. As because the size of the local companies will be small they can easily concentrate in marketing and distribution which will may reduce the demand for Surf Excel. 7) Obstacles faced Surf Excel is facing the following obstacles in the market. •

No direct involvement in distribution chain.

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Unable to sell Surf Excel in a lower cost of its Competitors.

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Preference to low cost products of majority of the People in developing countries.

8) Increase in Production & Labour cost

The production cost and the labour cost is increasing in a massive way all over the world. But by the increase in cost, it is not possible to increase the price for Surf Excel like a consumable product. By a slight change, it may result in a huge reduction in demand. 9) Chances for the Price War

The primary goal of every Manufacturer will be to increase the demand for their productions. Only if there is sufficient demand for the products then only the company can survive in this competitive market. For this reason if the company tries to reduce the price of the Surf Excel brands, it may result in Price War in the market. By this the product may went to loss for the company.

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Conclusion By the detailed study on the product and market of Surf Excel it was able to get a clear picture of the Past & Present of the products and was able to get in to the assumptions about the future of the product. The SWOT analysis can be concluded with the following findings / observations. The Brand “Surf Excel” has a good and successful past and present in all the markets. It has been sold successfully and has created a good demand all the time. It is also holding a good place in the detergent market with a share of around 10% - 15%. As like for all other products Surf Excel is also facing a tight Competition in the Detergent Market. Since the Competition is too strong the company has to keep on watching the market closely for avoiding any sudden collapse for the product. For surviving in the Competitive Market in the coming years HUL has to take lot of steps in developing the Surf Excel Products by doing Researches and Analysis, Introducing Innovations and new Technologies, Producing different varieties of products according to the taste of the consumers etc. Finally, it should note that the company may have to face lot of threats in the coming years like, Political Threats, Legislation Threats, on going Economic Crisis, Changing life style of the people etc. If the company is able to overcome all the Threats and can prepare themselves for facing the problems in advance, it can achieve a good growth for

“Surf Excel”

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