corporate strategy session (dabur) 25.10
TRANSCRIPT
Case StudyPGDM 2009-11
1.Dabur –The Brand What Branding Strategy?
2.Product Offerings3.Brand Equity (Strength,
Analysis)4.Restructuring (Why and How-
the Approach?)5.SWOT (What)?6.Marketing Mix (What)?
ISSUES
• Dabur India is the 4th Largest FMCG Company in India
• Legacy of over 100 years• Strategic Business Units in Health care,
Personal care and Food products• Dabur has a turnover of Rs.1899.57 crore with
powerful brands like Dabur Amla, Dabur Chyawanprash, Real, Vatika and Hajmola
• Bottom Line Driven Company• Product marketed in over 50 countries• Leader in Herbal Digestives with 90% market
share
SOME FACTS
• Established : 1884• Founder : Dr. S K Burman• Basic Motive : Manufacture of Ayurvedic
Drugs• Achieved : By setting up manufacturing
units and setting up Research and Development Labs
• Expanded its product line in the mid 1900’s by launching Dabur Hair Oil and Chyawanprash
• Added Oral Care Products in the 1970’s • Shifted base from Kolkata to New Delhi in 1972 • Launched Hajmola tablet in 1978
• In 2004,restructured its portfolio and structured itself into three main SBU’s
• Has 5 power brands under its portfolio• Entered new markets like the Juice
segment, branded packaged soups segment
• Developed its Oral Care Market • Increasing its geographical spread • Aims at doubling its revenue and profit by
the end of 2009-2010
Group Com
prises 1. Dabur Finance. 2. Dabur Nepal Pvt Ltd. 3. Dabur Egypt Ltd. 4. Dabur Overseas Ltd. 5. Dabur International Ltd.
Established in 1884, Dabur India Ltd is the largest Indian FMCG and “Ayurvedic” products company.
Products Groups
1. Health care, 2. Food products, 3. Natural gums &
allied chemicals, 4. Pharma, and 5. Veterinary
products.
Leading
Brands
1. Dabur Amla, 2. Dabur,3. Chyawanaprash,4. Vatika, 5. Hajmola, 6. Lal Dant
Manjan, 7. Pudin Hara, 8. Real range of
fruit juices.
PERSONAL CARE SEGMENT• Hair Care Oil and Shampoo
(VATIKA)• Skin Care (FAIRENESS FACE PACK)• Oral Care (DABUR RED GEL AND• TOOTHPASTEFOODS PRODUCT RANGE• Juice ( REAL/ REAL ACTIV)• Dabur Honey• Hommade (Packaged Soups)
AYURVEDIC HEALTH PRODUCTS• Digestive Segment (HAJMOLA)• Dabur Chyawanprash• Pudin Hara
AYURVEDIC DRUGS
HARMACEUTICALS
• Different brands have its own marketing and advertising team • Different brands had different promotions • Utilized the popularity of Indian films in the domestic and global
markets to promote its brands • Undertook the most advertising campaign with Mr. Bachchan
endorsing Dabur brands • Signed cricketer Virendar Sehwag and his wife for selected Oral,
Hair and Healthcare product• Adopted the INTEGRATED MARKETING
COMMUNICATION programme in 2003 to increase its market share • Targeted the Institutional market which included hotels and airlines
Partnered with Institutional clients to provide value added services • Held various contests • Training sessions and workshops for food and beverage
professionals • Tie-up with Discovery Channel
BRAND EQUITY
The Brand Equity of Dabur can be judged by the model
BRAND ASSET VALUATOR - Four Key components :
1.Differentiation2.Relevance3.Esteem4.Knowledge
As Dabur is a well- established brand all the four components are high
HERBAL has been Dabur’s Brand equity since centuries
How Dabur Builds its Brand EquityIdentities making up the brand
• Choice of its a.logo, b.symbol, c.slogan, d.packaging
Marketing Activities
Associations of the brand
Why Restructuring ?
Problems1.Diversified into too many groups
• Lower Sales and Profits2.Image
• Ayurvedic Company3.Association
• Particular Age Group - 35 Plus Age
Restructuring Process1.Cut down on all its low Contribution Brand2.Position(ed) itself as an Herbal specialist
in the FMCG sector3.Set Higher Targets4.Identify/ied Growth Drivers5.Filling up the gaps in Oral Care as wellas
Hair Care market6.Set itself a new Brand Strategy7.Enter(ed) new potential areas and
targeted the youth as well school children
Branding StrategyChanged its branding strategy by moving from the Umbrella Strategy to the Key brand Strategy. Dabur has categorized itself into five power brands
1.Dabur (HEALTHCARE)2.Vatika (HAIR CARE)3.Anmol (PERSONAL CARE)4.Real ( JUICES)5.Hajmola (DIGESTIVE SUPPLEMENTS
PRODUCT LINE EXTENSION
In the JUICES range Dabur introduced :
Coolers (Low fruit Content)Real ( High fruit pulp Content)Real ACTIVE (Health Conscious Youth)Real Juniors (for the children below 6 years of age)Real School Pack
Why these StrategiesLine Extension Strategy was adopted by Dabur because:
1. It could attract different target audience2. Could renew Interest and liking for the brand by introducing
new variants3. It could increase its market share4. Diversify without much risk 5. Moved from its Core strategy and hence could give customers
something better and different6. It could attract different target audience7. Could renew Interest and liking for the brand by introducing
new variants8. It could increase its market share9. Diversify without much risk10.Moved from its Core strategy and hence could give customers
something better and different
Dabur through its diversified brands has tapped various target segments like the :
1. Youth2. Health Conscious People3. School Children4. Mothers5. Existing Old age group
PRODUCT
Products have been divided into 5 power brands
Quality : HighSizes : Available in different sizesDesign : Available in Tetra Pack, Bottles, Sachets
Sr.NoBrand Type
1. Dabur Healthcare (Chyawanprash)2. Vatika Herbal Beauty Brand3. Anmol Personal Care Market4. Real Foods5. Hajmola Digestive
PRICE
As, Dabur had different sub-categories it came out with variable pricing to reach each and every target segment
E.g. : One- litre bottle of Cooler (juice) was priced at Rs.50
• Selective Price Reduction to increase Demand
• Introduction of Smaller packs at Rs.5• Came out with Rs.1 sachet of Vatika
Shampoo to increase market share• Cutting Price to stand out against
competition
PLACE
Dabur constantly kept on increasing its geographic spread to increase its sales revenues
• Entered the South Indian Market• Expanding in the International Market• Presence in over 50 countries• Subsidiaries established in Nepal, Nigeria,
Bangladesh and Pakistan
Focus Areas : Asia Pacific, Afghanistan, Russia and other CIS countries
PROMOTIONS
• Different brands have its own marketing and advertising team • Different brands had different promotions • Utilized the popularity of Indian films in the domestic and global
markets to promote its brands • Undertook the most advertising campaign with Mr. Bachchan
endorsing Dabur brands • Signed cricketer Virendar Sehwag and his wife for selected Oral,
Hair and Healthcare product.• Adopted the INTEGRATED MARKETING
COMMUNICATION programme in 2003 to increase its market share
• Targeted the Institutional market which included hotels and airlines
• Partnered with Institutional clients to provide value added services
• Held various contests • Training sessions and workshops for food and beverage
professionals• Tie-up with Discovery Channel
STRENGTHS
1. Century Old Company2. Established Brand3. Ayurvedic/ herbal Product line4. Leader in Herbal Digestives where the
product has 90% of the market share5. Innovativeness in Promotions
WEAKNESSES
1. Profitability is uneven across product line
OPPORTUNITIES
1. Extend Vatika brand to new categories like Skin Care and body wash segments
2. Launch several OTC brands3. Southern India Market4. Exploring new geographical
areas- local as well global5. Oral Care Segment6. Launching new Products like
Hair oils, Herbal and Gel Toothpastes etc
THREATS
1. Competition in the FMCG sector from well established names
2. Other fields of medicine- Allopathic and Homeopathic
3. Markets where Herbal products are not recognised
THANK YOU!!!
Strategic Management Process
PGDM 2009-11
WHAT IS “STRATEGY”?1. Consists of competitive moves &
business approaches to produce successful performance
2. Management’s “game plan” for
Running the businessStrengthening firm’s competitive position
Satisfying customersAchieving performance targets
THINKING STRATEGICALLY
3. HOW WILL WE GET THERE?
THREE BIG STRATEGIC QUESTION
S
1. WHERE ARE WE NOW?
2. WHERE DO WE WANT TO GO?• Business positions
management wants to stake out
• FINANCIAL outcomes to achieve
• STRATEGIC outcomes to achieve
FIVE TASKS OF STRATEGIC MANAGEMENT
TASKS
1
5
2
4
3
Defining business, stating a mission, & forming a strategic vision
Setting measurable objectives
Crafting a strategy to achieve objectives
Implementing & executing strategy
Evaluating performance, reviewing new developments, & initiating corrective adjustments
FIRST TASK
DEVELOPING A VISION
&MISSION
DEVELOPING A VISION & MISSION
Begins with thinking strategically
• About firm’s future makeup• Forming vision of firm’s future in 5-10 years
Task is to
1. Inject SENSE OF PURPOSE into firm’s activities2. Provide LONG-TERM DIRECTION3.Give firm STRONG IDENTITY4.Decide “WHO we are, WHAT we do, & WHERE
we are headed”
Mission
Ѳ An organization’s MISSION
reflects management’s vision of what firm seeks to do & become
provides clear view of what firm is trying to accomplish for its customers
indicates intent to stake out a particular business position
Strategic Visions - Specific Questions
• What business are we in now?• What business do we want to be in?• What will our customers want in future?• What are expectations of our stakeholders?• Who will be our future competitors? suppliers?
Partners?• What should our competitive scope be?• How will technology impact our industry?• What environmental scenarios are possible?
Why a Shared Vision Matters A strategic vision widely shared among all employees functions similar to how a magnet aligns iron filings
when all employees are committed to firm’s long-term direction, optimum choices on business decisions are more likely
individuals & teams know intent of firm’s strategic vision
daily execution of strategy is improved
Mission Statements
To be America’s best quick service restaurant chain. We will provide each guest great tasting, healthful, reasonably priced fish, seafood, and chicken in a fast, friendly manner on every visit.
To be the world’s best in chemicals and electronic imaging.
The mission is to improve the quality of human life; to enhance self-reliance and concern for others; and to help people avoid, prepare for, and cope with emergencies.
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Why Bother to Define “Who,” “What,” & “Where?
1. Helps managers avoid trap of
• Trying to move in too many directions• Being so confused about firm’s direction
that effective actions are NOT taken to move in ANY direction
2. To successfully chart firm’s future, managers must• Know where firm is now• Have view of where it ought to be headed• Recognize time to shift to a new direction
SECOND TASK
SETTINGOBJECTIVES
1. Purpose of setting OBJECTIVES is to
• Convert mission into performance targets• Create yardsticks to track performance• Establish performance goals requiring stretch• Push firm to be inventive, intentional, focused
2. Setting CHALLENGING but ACHIEVABLE objectives guards against
• Complacency• Drift• Internal confusion• Status quo performance
3. Two Types of Objectives Needed
• Financial Objectives : Outcomes that relate to improving firm’s financial performance
• Strategic Objectives : Outcomes that will result in greater competitiveness & stronger long-term market position
Types of Objectives1. Financial Objectives
• Increase earnings growth from 10 to 15% per year
• Boost return on equity investment from 15 to 20%
• Achieve & maintain a AA bond rating
2. Strategic Objectives
• Up firm’s market share from 18 to 22%• Overtake rivals on quality or customer service• Attain lower overall costs than rivals• Become leader in new product introductions• Achieve technological superiority
CORPORATE OBJECTIVESNike : Protect & improve Nike’s position as the number
one athletic brand in America. Build a strong momentum in growing fitness
market. Intensify the company’s effort to develop
products that women need and want. Explore the market for products specifically
designed for the requirements of maturing Americans.
Direct & manage the company’s international business as it continues to develop.
Continue the drive for increased margins through proper inventory management and fewer, better products.
Strategic Corporate Financial Objectives
Ford Motor Company
: To satisfy our customers by providing quality cars & trucks, developing new products, reducing time it takes to bring new vehicles to market, improving efficiency of all our plants & processes, & building on our teamwork with employees, unions, dealers, & suppliers.Atlas
Corporation
: To become a low-cost, medium-size gold producer, producing in excess of 125,000 ounces of gold a year and building gold reserves of 1,500,000
THIRD TASK
CRAFTING A
STRATEGY
Strategy Making Concerns
HOW to
1. Achieve desired strategic & financial objectives
2. Out-compete rivals & win a competitive advantage
3. Respond to changing industry & competitive conditions
4. Defend against threats to firm’s well-being
5. Grow the business
Strategy as Planned and
Reactive to Changing Circumstances
Actual Strategy
Planned Strategy
Adaptive Reaction
Crafting A StrategyObjectives
Targeted results & outcomes
Strategy
HOW to achieve outcomes
A firm’s actual strategy is a blend of1. Deliberate &
purposeful actions - intended strategy
2. As needed reactions to unanticipated developments & fresh competitive pressures - unintended strategy
Understanding Company Strategy -What to Look For
The Pattern of Actions
That Define Strategy
Diversification
Forward /
Backward Integrati
on
Actions to Improve
Short Term
ProfitsHow Key Functions are
ManagedDefensive
Moves
Pursuing New
Opportuniti
es
Responses to Changing Conditions
Fresh Offensive to Gain Market
EdgeProduct Line,
Quality, or
ServiceGeographic
Coverage
Why Good Management of Strategy Matters?1. Powerful execution of a powerful strategy is a
proven recipe for success
2. Crafting & implementing strategy are CORE management functions
3. To qualify as WELL-MANAGED, a firm should• Have an attractive strategy• Demonstrate proficiency in executing
strategy
4. A good strategy is strong enough to overpower rivals & flexible enough to overcome obstacles
5. Without proficient strategy execution, firm cannot achieve peak performance
Why is a Firm’s Strategy Constantly Evolving?
Because firms often need to react to• Changing market conditions• Moves of competitors• New technologies & production• Capabilities• Evolving customer needs & Preferences• Political & regulatory changes• New windows of opportunity• Fresh ideas to improve current strategy• A crisis situation
FOURTH TASK
IMPLEMENTING STRATEGY
Implementing strategy involves
• Creating fits between way things are done & what it takes for effective strategy execution
• Executing strategy proficiently & efficiently
• Producing excellent results in timely manner
• Most important FITS are between strategy AND Organizational capabilities
• Reward structure• Internal support
systems• Organizational culture
Strategy Implementation
Strategy implementation is an internal, operations-driven activity involving organizing, budgeting, motivating, culture-building, supervising, and leading to “make the strategy work” as intended!
WHAT DOES STRATEGY IMPLEMENTATION INCLUDE?1. Building a firm capable of carrying out strategy successfully
2. Allocating ample resources to strategy-critical activities
3. Establishing strategy-supportive policies
4. Instituting best practices & programs for continuous improvement
5. Installing support systems
6. Tying reward structure to achievement of results
7. Creating a strategy-supportive corporate culture
8. Exerting strategic leadership
FIIFTH TASK
EVALUATING PERFORMANC
E
1. None of the tasks of strategic management are a one-time only exercise
• Times & conditions change• Events unfold• Better ways to do things become evident• New managers with different ideas take over
2. Managers must
• Constantly evaluate performance• Monitor situation & decide how well things are going• Make necessary adjustments
3. Corrective adjustments can entail
• Altering firm’s long-term direction• Redefining the business• Raising or lowering performance objectives• Modifying the strategy• Improving strategy execution
STRATEGIC ROLES OF A BOARD OF DIRECTORS1. See that five strategic
management tasks are performed adequately
2. Review important strategic moves & officially approve strategic plans
3. Ensure strategic proposals are adequately analyzed & superior to alternatives
4. Evaluate caliber of top management’s strategy-making & implementing skills
5. See that five strategic management tasks are performed adequately
6. Review important strategic moves & officially approve strategic plans
7. Ensure strategic proposals are adequately analyzed & superior to alternatives
8. Evaluate caliber of top management’s strategy-making & implementing skills
BENEFITS OF STRATEGIC APPROACH TO MANAGING1. Guides entire firm regarding “what it is we are trying to do & to achieve”
2. Lowers management’s threshold to change
3. Provides basis for evaluating competing budget requests & steering resources to strategy-supportive, results-producing areas
1. Unites numerous strategy-related decisions of managers at all organizational levels
2. Creates a PROACTIVE, rather than REACTIVE, atmosphere
3. Enhances LONG-RANGE performance
Thank You All