FMCG ( FIRST MOVING CONSUMER GOODS) 2021

UNIT:-1 INDUSTRIAL / SECTORAL SCENARIO

 Fast Moving Consumer Goods (FMCG):-

1.1 Introduction : -
FMCG First Moving Consumer Goods which is use in our day to day life.
The First Moving Consumer Goods are the products which sell quickly. It’s have
very short life in the market. FMCG's have short shelf life because of high
consumer demand.

First Moving Consumer Goods also known as Consumer Packaged goods are
products that are sold quickly and at a relatively low cost.

First Moving Consumer Goods Company of India are sold packaged foods,
toiletries, consumbles and personal care brands. First Moving Consumer Goods or
consumer packaged goods is the 4th largest sector of the Indian Economy.

First Moving Consumer Goods have a high inventory turnover and are
contrasted with speciality items which have lower sales and higher carrying
charges. Many retailers carry only FMCGs particularly hypermarkets, Big Box
stores and warehouse club stores. Small conveince stores also stock fast moving
goods, the limited shelf space filled with higher turnover items.

The First Moving Consumer Goods (FMCG) industry essentially comprises

Consumer Non-Durable (CND) products and caters to the everyday need of the
population. This has thrown up several opportunities and challenges for FMCG
companies.

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1.2 HISTORY:-

The period from the 1950’s to the 1980’s did not see much of a growth in this
sector owing to the low purchasing power of Indian’s and the government pushing
for small scale sectors. HUL and AMUL were one of the only companies that
stuck around and evolved as market players.

After 1991, the FMCG industry was inspired by international companies

which also allowed government intervention to operate in India. The economic
reforms of 1991 not only brought a higher number of domestic choices but also
imported products.

Indian government was inclined towards favouring the local shops and
retailers. Between 1980 and 1990, people wanted more variety of products which
encouraged.

What started off in 1912 as a single route travel channel connecting two parts
of erstwhile India (Karachi and Delhi) is now a booming industry, poised to
become the largest industry of its kind in the world by 2030.

Fast-moving consumer’s goods are nondurable products that sell quickly at

relatively low cost. FMCGs have low profit margins, but they account for more
than half of all consumers spending.

Examples of FMCGs include milk, gum, fruit and vegetables, toilet paper,
soda, beer, and over-the-counter drugs like aspirin.

Evolution of Hindustan Unilever Limited

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1.3 OVERALL WORKING OF THE SECTOR :-

This FMCG sector has the responsibility of producing, distributing, and marketing
goods so that their continuous consumption by the public takes place smoothly. In
the last 10 years, the revenue of FMCG in India has been growing at an
impressive rate of 21.4%..

Fast-moving consumer goods are products that sell quickly at relatively low cost.
These goods are also called consumer packaged goods. FMCGs have a short shelf
life because of high consumer demand (e.g., soft drinks and confections) or
because they are perishable (e.g., meat, dairy products, and baked goods).

Revenue of FMCG sector reached Rs. 3.4 lakh crore (US$ 52.75 billion) in FY18
and is estimated to reach US$ 103.7 billion in 2020.

HUL (Hindustan Unilever):-

It is a subsidiary of Unilever, a British company. Its products include foods,

beverages, cleaning agents, personal care products, water purifiers and other fast-
moving consumer goods. HUL was established in 1931 as Hindustan Vanaspati
Manufacturing Co.

AMUL (Anand Milk Union Limited)

The Amul Model of dairy development is a three-tired structure with the dairy
cooperative societies at the village level federated under a milk union at the
district level and a federation of member unions at the state level. Establishment
of a direct linked producers and consumers by eliminating middlemen. The Amul
Model has helped India to emerge as the largest milk producer in the world. Their
milk is processed in 222 District Co-operative Milk Union and marketed by 28
State Marketing Federations, ensuring a better life for millions.

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PATANJALI :-
Patanjali is an Indian packaged goods company which used
Ayurvedic or Natural Ingredients to manufacture the products. The Patanjali
Ayurveda manufactures Health Care, Personal Care, Home Care and Beverages
products etc. It was founded by Baba Ramdev and Acharya Balkrishna in 2006.

1.4 CHALLENGES FACED BY THAT SECTOR IN INDIA:-

 Lack of Efficiency in Reading the Selling Scenario. ...

 Providing Relative Servicing. ...
 Reaching Right Stores at the Right Time. ...
 No Visibility into Work Order Management. ...
 How Can Technology Help?
 Shopers are smarter
 Private label growth

HUL (Hindustan Unilever):-

The problems that Hindustan Unilever Limited currently facing is increasing
input costs and operations costs due to rise in raw material costs, increasing
imitative and spurious products, and stiff competition from other FMCG
players.

There is slowdown in the global economy and the problem that started in the
financial sector extended rapidly to other sectors affecting not only the US but
the global economy. Most of India’s domestic sectors are also affected
including country’s exports performance and FMCG sectors.

AMUL (Amul Milk) :-

After becoming a national brand, Amul, owned by Gujarat Cooperative Milk

Marketing Federation (GCMMF) is facing a new challenge – of meeting the
increasing demand from across the country. What started with two villages and
250 litres of milk a day in the 1940s is now a Rs 13,765-crore dairy major. The
demand now is much more than what Gujarat can feed.

PATANJALI:-
The company says its rapid expansion did bring some teething problems, but
that they had been overcome. Patanjali also suffered, like many others, from
Modi's 2016 ban on high-denomination banknotes and 2017 introduction of a
new goods and services tax. The moves disrupted economic activity.

Unplanned expansion, a poor supply chain, inconsistent product quality and

business practices – along with the slowdown – have come together to pull the
company down like no others in the sector, analysts said. Launched in 2009,
Patanjali had badly disrupted the FMCG market over the last five years.

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1.5 SWOC Analysis :-

STRENGTH

THREATS SWOC WEAKNESSES

OPPORTUNITIES

 STRENGTH:-

 Low operational costs

 Presence of established distribution networks in both urban and rural
areas
 Presence of well-known brands in FMCG sector
 Deep roots in local culture & great understanding of consumer needs

 WEAKNESS: -

 Lower scope of investing in technology and achieving economics of

sale, especially in small sector
 Low exports level
 Counterfeit Products. These products narrow the scope of FMCG
products in Rural and Semi-Urban market

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 OPPORTUNITIES

 Untapped rural market

 Rising income levels, i.e. increase in purchasing power of consumers
 Large domestic market – a population of over one billion
 Export potential
 High consumer goods spending

 CHALLENGES

 Removal of import restriction resulting in replacing of domestic brands

 Slowdown in rural demand
 Tax and regulatory structure

1.6 MAJOR PLAYERS IN THE SECTOR:-

 Hindustan Unilever Ltd.

 ITC (Indian Tobacco Company)
 Nestlé India
 GCMMF (AMUL)
 Dabur India Ltd
 Asian Paints (India)
 Cadbury India
 Britannia Industries Ltd.
 Procter & Gamble Hygiene and Health Care
.

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1.7 GDP CONTRIBUTION BY THAT SECTOR:-

The FMCG sector is the fourth largest industry in India contributing

nearly 20% to the Gross Domestic Product. FMCG industry in India is expected
to grow at the rate of 27.9% CAGR (Compounded Annual Growth Rate) to sum to
US$103.7 billion by 2020. The rural setting accounts for 45% revenue share while
the urban setting dominates with 55% revenue share of the total revenue of the
FMCG industry.
FMCG market has grown at a faster pace in rural India compared to urban
India. Semi-urban and rural segments are growing at a rapid pace and FMCG
products account for 50% of the total rural spending. Revenue of FMCG sector
reached Rs. 3.4 lakh crore (US$ 52.75 billion) in FY18 and is estimated to reach
US$ 103.7 billion in 2020.
According to Nielsen, the Indian FMCG industry grew 9.4% in the January-
March quarter of 2021, supported by consumption-led growth and value
expansion from higher product prices, particularly for staples. The rural market
registered an increase of 14.6% in the same quarter and metro markets recorded
positive growth after two quarters.

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1.8 FACTS / FIGURE:-

1.8.1 FACTS:-
 “MAGGI IS THE MOST CHOSEN FOOD BRAND”
 “COLGATE IS THE MOST CHOSEN HEALTH AND
BEAUTY BRAND IN THE WORLD”
 “AS CONSUMERS BECOME HEALTHER, AN
OPPORTUNITY ARISES IN SPORT DRINKS”
 “SNACKS ARE BOUGHT BY 80% OF THE WORLD’S
HOUSEHLDS”
 “READY TO DRINK TEA IS THE FASTEST GROWING
FMCG CATEGORY”
 “FRESH-MADE GROWS IN POPULARITY AS FOOD
SAFEY REMAINS VITAL”

1.8.2 FIGURE:-

 FMCG in India is one of the Key contributors to its Economy

 FMCG is fourth largest sector in India
 The market size for FMCG in the country was estimated to be
as high as 110 billion U.S. dollars in 2020 and expected to
grow.
 Food and beverages, which accounts for 19% of the sector
 healthcare, which accounts for 31% of the share
 household and personal care, which accounts for the remaining
50% share.

1.9 GLOBAL PERSPECTIVE:-

Main
markets are
India and
China

Expected Global Expected ti

increase in increase
supplier FMCG capital
prices industry expenditure

Expected to
innovate
new
products

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 SUMMARY:-

The FMCG First Moving Consumer Goods sector which is the India’s 4 th
largest sector in India. The FMCG sector contributes around 20% GDP to the
country. The FMCG contains short-life in the market shelf. The FMCG can be
used in our day to day life. The FMCG products are sold very fast the demand
and supply are always in up and down graph. The consumer’s taste, price always
being in remarked. Due to high demand and supply the FMCG sector always
faced challenges and competitions. The local vendors are the most affecting
threats for the Limited sectors. There is high supply and demand in the packaging
materials for the FMCG products.

There is many Advertising Marketing and new launching products activities

are on going every day. For the FMCG imports and Exports there is high
shipment cost.

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UNIT: - 2 COMPANY PROFILE

2.0 Name and Location of Company:-

Hindustan Unilever Amul Patanjali

limited

Address :- Address :- Address :-

Unilever House, Amul Dairy Road, Opp: Hotel Patanjali Food & Herbal
B D Sawant Marg, Mumbai, Surabhi, Anand – 388001, park Vill – Padartha, Laksar
Maharashtra, 400099 Gujarat, India. Road Haridwar 249404,

Email:- Email:- Email:-

levercare.shareholder@unile [email protected] dhanveer@patanjaliayurved
ver.com .org

Web Url: Web Url: Web Url:

http://www.hul.co.in http://www.amul.com https://patanjaliayurved.org

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2.1 Name & Location of other branches :-

Hindustan Unilever Amul Address :- Patanjali Address :-

limited Address :-

Gandhigram Bus-stop, Amul Milk Center, Unnamed Patanjali, Shop No 8,c

Survey number 367, Amli, Road, Khariwad, Marwad, Wing,gulmohar Housing
396230 Dadra and Nagar Haveli and Soc, P L kale Guruji
Daman and Diu 396210. Marg,off, Ranade Rd,
Dadar West, Mumbai,
Maharashtra 400028

Khanvel Rd, main road, Inside Chanod Gate,Chanod Pittie Group (Patanjali),
Dapada, Dadra and Nagar Gate, Chanod Colony, Chanod, Near, Pittie Group 1st
Haveli and Daman and Diu Gujarat 396191 Floor, Plot no.15, CST 46,
396240 Modern Warehouse, Mahal
Indusrial Estate, Paper Box
Rd, Andheri East, Mumbai,
Maharashtra 400093

7V6P+QXW Hul Hindustan Amul Dairy Store, Station Rd, Patanjali Distributors, Shop
Unilever Mahendra Kapadia Chal, Valsad, Gujarat 6, Kanta kunj, Telli galli
Logistics Bhilad, Talwada, 396001 ,near citi point, Mumbai,
Gujarat 396105 Maharashtra 400069

Hindustan Unilever LTD, GCMMF - AMUL, West Patanjali Ayurveda, Guru

Warehouse No. G2, Sai Mumbai Branch, 37, Bimbisar Gobind Singh Marg,
Dhara, Bhoirgaon, Nagar Rd, Bimbisar Nagar, Mulund Colony, Mulund
Maharashtra 421302 Goregaon, Mumbai, West, Mumbai,
Maharashtra 400065 Maharashtra 400082

Plot no 2, Hindustan QXPW+HP5 Amul New Office, Shop No. 2, Patanjali

Unilever Limited, Uttara, Golf City, Yusufnagar, Uttar Aarogya Kendra Santacruz,
Sector 11, CBD Belapur, Pradesh 226002 Mahesh Apartment, VM
Navi Mumbai, Maharashtra Bhargav Rd, near Khira
400614 Industry, Hasmukh Nagar,
Santacruz West, Mumbai,
Maharashtra 400054

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2.2 Year of Establishment:-

Hindustan Unilever Amul Patanjali

Limited
17th October 1933 14th December, 1946 January 2006

2.3 Brief History:-

1. HUL :-
Hindustan Unilever Limited (HUL) is one of India’s oldest First Moving Consumer
Goods companies. It is a subsidiary of Unilever, a British-dutch company.

In 1931, Unilever set up its first Indian subsidiary, Hindustan Vanaspati Manufacturing
Company, followed by Lever Brothers India Limited (1933) and United Traders Limited (1935).
These three companies merged to form HUL in November 1956. HUL offered 10% of its equity
to the Indian public, being the first among the foreign subsidiaries to do so.

By 1903, the company had launched Red Label tea in the country. In 1912, Brooke
Bond & Co. India Limited was formed. The liberalisation of the Indian economy, started in
1991, Tata Oil Mills Company (TOMCO) merged with HUL, effective from April 1, 1993. In
1996, HUL and yet another Tata company, Lakme Limited, formed a 50:50 joint venture, Lakme
Unilever Limited, to market Lakme's market-leading cosmetics and other appropriate products
of both the companies. Subsequently in 1998, Lakme Limited sold its brands to HUL and
divested its 50% stake in the joint venture to the company.

HUL formed a 50:50 joint venture with the US-based Kimberly Clark Corporation in
1994, Kimberly-Clark Lever Ltd, which markets Huggies Diapers and Kotex Sanitary Pads.

HUL has also set up a subsidiary in Nepal, Unilever Nepal Limited (UNL), and its
factory represents the largest manufacturing investment in the Himalayan kingdom. The UNL
factory manufactures HUL's products like Soaps, Detergents and Personal Products both for the
domestic market and exports to India.

In January 2000, in a historic step, the government decided to award 74 per cent
equity in Modern Foods to HUL, thereby beginning the divestment of government equity in
public sector undertakings (PSU) to private sector partners.

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2. AMUL: -

Kaira District Milk Union Limited (later renamed to Amul - Anand Milk Union
Limited) was founded in 1946.Through the efforts of Tribhuvandas Patel. Amul's foundation
was a significant contributor to the white revolution in India.

Tribhuvandas Patel under the guidance of Sardar Vallabhbhai Patel became the
founding chairman of the organization and led it until his retirement in the 70s. He hired Dr.
Verghese Kurien in 1949.

He convinced Dr. Kurien to stay and help with the mission.Under the chairmanship of
Tribhuvandas, Dr. Kurien was initially the general manager and helped guide the technical and
marketing efforts of Amul. Dr. Kurien was the chairman of Amul briefly after Tribhuvandas
Patel died in 1994.

Amul brought about white revolution in India and transformed the unorganised dairy
sector to an organised one. They pioneered products like milk powder and baby food from
buffalo milk. The brand continues to grow stronger by the day and sells around 3960 tonnes of
milk products every year.

Amul is an Indian dairy cooperative society, based at Anand in the Indian state
of Gujarat. Formed in 1946, it is a cooperative brand managed by a cooperative body,
the Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF), which today is jointly
owned by 36 lakh (3.6 million) milk producers in Gujarat, and the apex body of 13 District Milk
Unions, spread across 13,000 villages of Gujarat. Amul spurred India's White Revolution, which
made the country the world's largest producer of milk and milk products.

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3. PATANJALI :-
Patanjali Ayurved, (commonly known as Patanjali), is
an Indian multinational consumer packaged goods company based in Haridwar, India. It was
founded by Baba Ramdev and Acharya Balkrishna in January 2006. Its registered office is
located in Delhi, with manufacturing units and headquarters in the industrial area of Haridwar.
The company manufactures cosmetics, ayurvedic medicine, and food products.

1. 1997
PAL started as a small pharmacy in Haridwar

2006 2.
Established as a Pvt. Ltd. company

3. 2010
The world’s largest food park opened

2012 4.
Hit revenues of Rs. 450 cr, 450 stores

5. 2015
Hit revenues of Rs. 2,000 Cr., has 4000 stores

2012 6.
Hit revenues of Rs. 2,000 Cr., has 4000 stores

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2.4 Name of Founder and Promoters

Hindustan Unilever Limited: - Founders LEVER BROTHERS

Name: William Lever,

D.O.B: 19 September 1851

Died: 7 May 1925 (aged 73)

Nationality: British

Name: - James Darcy Lever

D.O.B :- 10 February 1854

Died: - 29 March 1910

Nationality: - British

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Amul : - Founders

Name: - Verghese Kurien

D.O.B:- 26 November 1921

Died: - 9 September 2012

Nationality: - Indian

Name: - Tribhuvandas Kishibhai Patel

D.O.B:- 22 October 1903

Died: - 3 June 1994

Nationality: - Indian

Amul : - Promoters

Category No. Of Shares Held % of Shares Holding

Indian Promoters 1323850 50.92

Amul Sumatichandra Mehta 112100 4.31

Sumatichandra H Mehta 90150 3.47

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Patanjali: - Founders

Name:- Swami Ramdev (Ramkrishna Yadav)

D.O.B:- 25 December 1965

Name: Acharya Balkrishna

D.O.B: 4 August 1972 (age 49 years)
Nationality: Indian

Patanjali : - Promoters

Category % of Shares Holding

Acharya Balkrishna 94.0%

Poddar Sarwan 3.0%

Poddar Sunita 3.0%

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2.5 Vision Statements : -

Hindustan Unilever Limited (HUL):-

 Unilever has a simple but clear purpose - to make sustainable living commonplace.
We believe this is the best long-term way for our business to grow.

 Our 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.

 Unilever's corporate vision is “to make sustainable living commonplace. We

believe this is the best long-term way for our business to grow.” This vision
statement puts emphasis on sustainability, especially among consumers.

1. Amul:-
Amul Vidya Shree & Vidya Bhushan: Amul's vision is to see an educated, talented
and strong youth in a developed India of the future and thereby contribute towards
nation building. We at Amul believe that the sound education of its youth is the
foundation of every

 Our Vision is not just to be rated among the top 5 brands of India in Interior Field,
but, more importantly, to strive to attain the leadership position in makin our
people aware to protect & save the nature by using plywood and related products
for their wood work.

Patanjali:-

 Keeping Nationalism, Ayurved and Yog as our pillars, we are committed to create
a healthier society and country.

 To raise the pride and glory of the world, we are geared up to serve people by
bringing the blessings of nature into their lives.

 With sheer dedication, scientific approach, astute planning and realism, we are
poised to write a new success story for the world.

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2.6 Mission Statement and Values Statement :-

2.6.1 Mission Statement :-

Hindustan Unilever Limited (HUL):-

 On any given day, two billion people use Unilever products to look good, feel good
and get more out of life.
 We believe that as a business we have a responsibility to our consumers and to the
communities in which we have a presence.
 Around the world we invest in local economies and develop people’s skills inside
and outside of Unilever.
 And through our business and brands, we run a range of programmes to promote
hygiene, nutrition, empowerment and environmental awareness..

Amul:-
 Mission Our Mission is to manufacture world class products of outstanding
qualities, providing related services and solutions to our client while utilizing latest
technologies, highest business standard, work ethics Corporate Governance so we
can make every customer SMILE.

 GCMMF endeavour to satisfy the taste and nutrition requirements of the customers,
of the world through excellence in marketing by their committed team. Through co-
operative networking, they are committed to offer quality products that provide best
value for money.

Patanjali:-

 Making India an ideal place for the growth and development of Ayurveda and a
prototype for the rest of the world.

 Mission for Patanjali is making India an ideal launch pad for the growth and
development of Ayurveda and become a prototype for the rest of the world.

 Ayurveda is one of the oldest Indian system of medicine.

 Ayurveda means 'Science of life' with an integrated way of dealing with health and
nature derived medicine.

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2.6.2 Values Statement :-

Hindustan Unilever Limited (HUL):-

Values
• Integrity.
• Respect.
• Responsibility.
• Pioneering.

Amul:-

 As a result everybody at Amul is a person of integrity.

 The same applies to other values like 'excellence' or 'efficiency'.

 Another thing is that, we very rarely induct people at middle or higher levels. Most
of the people, who join Amul, join immediately after their college.

Patanjali:-

 Making India an ideal place for the growth and development of Ayurveda and a
prototype for the rest of the world.

 Keeping Nationalism, Ayurved and Yog as our pillars, we are committed to create
a healthier society and country.

 To raise the pride and glory of the world, we are geared up to serve people by
bringing the blessings of nature into their lives.

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2.7 Organizational Structure / Hierarchy :-

2.7.1 Hindustan Unilever Limited (HUL) :-
Chairman

Director Director Director Director Director HR

Finance Marketing Exports Research Technical

Director, Legal Director Director Director Director ICFD

& secretarial Beverages Personal Detergent
Products

Organizational Structure:-
Organizational Structure is the formal division of tasks, responsibilities and authority in
anorganization set-up. The framework, typically hierarchical, within which an organization arranges itslines of
authority and communications, and allocates rights and duties. Organizational structuredetermines the manner and
extent to which roles, power, and responsibilities are delegated, controlled,and coordinated, and how information
flows between levels of management.

2.7.2 Amul :-
The Amul Model of dairy development is a three-tiered structure with the
dairy cooperative societies at the village level federated under a milk union at the
district level and a federation of member unions at the state level.

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2.7.3 Patanjali :-

MD – Acharya Balakrishna

Head of Foods Head of Ayuveda Head of Cosmetics

Vp - Sales Vp - Sales Vp - Sales

Vp - HR Vp - HR Vp - HR

Vp – R&D Vp – R&D Vp – R&D

Organisational structure: -
The organisational structure of a firm describes the degree to which the
activities such as taskallocation, supervision and coordination are directed towards fulfillment of the
organisationalgoals. The working and performance of the company depends on the organisational
structurechosen. There are many types of structures for the companies to choose from. An analysis
ofthe organisational structure of Patanjali Ayurved Limited is given below.

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2.8 SWOT Analysis:-

2.8.1 Hindustan Unilever Limited (HUL) :-
STRENGTHS: -

Strong parentage and R&D, healthy cash coffers to

support innovation

Strong position in most of the categories of its

STRENGTHS presence

Unmatched distribution network , a must to cater

rural markets

Presence actross price points to straddle across entire

income pyramid

Healthy Shareholder Returns in the form of RoE and

dividend yield

Native Know How

WEAKNESSES: -

49% of HUVR's sales come from detergents and

personal wash

WEAKNESSES

Increase in Ad Spending, which may affect the

margins

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OPPORTUNITIES

OPPORTUNITIES

Consumer
• Change in Rural India’s • Favorable expenditure in food
source of income Demographics sector rose by 13%
• Government Focus • Increasing Consumer • Valued at
aspirations USD240mn –
• Futures Market
• Buoyant topline for packaged foods –
• Increase in MSP FMCG companies 5%, 14%(g)

• Massive Election • Modern retailing

Spending gaining coverage

THREATS

Losing market Share in Stiff competiton from

most of the categories, local as well MNC
matured and Growing players.

Threats

Rural income is yet

Receding Pricing powert dependant on agriculture
and in turn monsoon.

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2.8.2 Amul :-

SWOT
Technical Problem in Flexibility in
manpower, distribution, market, Milk vendors,
Demand, perishabition, Export Competition
Margins. Competiton. potential

2.8.3 Patanjali :-

SWOT
S-Strength
Brand Name, Strong TQM , Excellent Marketing Strategy
Innovative Personality, Cheap price cum Charming Products

W-Weakness
No standard advertising, Lower Concentration on Other top
countries, Lower Marketing strategies

O-Opportunities
Govt. Regulations, Maximum Taxes, Lack Of Support From
Foreign Govts.

T-Threats
Govt. Regulations, Maximum Taxes, Lack Of Support From
Foreign Govts.

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