1 HND BUSINESS STRATEGY REPORT ON FORMULATION NEW STRATEGY OF DABUR, ITS APPROACH ANALYSIS AND IMPLEMENTATION. LEARNING OUTCOME – 2, 3 & 4 Supervised By Ismat Jahan Lecturer of Finance and Accounting Faculty, School of Business Prepared By Kyajasine Marma ID:2014321008 School of Business Date of submission: 09 March 2015
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1
HND
BUSINESS STRATEGY
REPORT ON
FORMULATION NEW STRATEGY OF DABUR, ITS APPROACH ANALYSIS AND
IMPLEMENTATION.
LEARNING OUTCOME – 2, 3 & 4
Supervised By
Ismat Jahan
Lecturer of Finance and Accounting
Faculty, School of Business
Prepared By
Kyajasine Marma
ID:2014321008
School of Business
Date of submission: 09 March 2015
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Letter of Transmittal
Date: 9th
March, 2015
Ms. Ismat Jahan
Faculty, Finance & Accounting
School of Business
Sub: Submission of Report.
Dear Madam,
This is to inform you that, I’ve completed my report on formulating new strategy of Dabur, its
approach evaluation and implementation. Dabur is leading FMCG Company in India with over
60 countries globally.
While working, I tried to follow your guidelines and advise. And it was great experience for me,
working on it. I gathered information of Dabur from various sources to make this report.
I would be pleased if you read my report and if you need any query than don’t hesitate to
contact me.
You faithfully
………………………….
Kyajasine Marma
ID: 2014321008
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Acknowledgement
Making this report, a lot of individuals and organization who has contributed directly and
indirectly that never be erased. With my heartfelt thanks.
Firstly, I would like to thank my course instructor Ms. Ismat Jahan for her expert advice and
encouragement throughout this project.
Highly indebt to our institute, academicians and related person who created best environment
and opportunities to do this.
I am paying my gratitude to the Dabur India Limited, for their rich source of information-
websites, newspaper etc.
This preparation on report never been possible without the help and support of my beloved
parents.
Thanks Favela for Unwavering friendship and contribution.
I hope the stages of learning and preparing of this work with my best effort will be very much
supportive in my future working life.
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Executive Summary
Dabur India Limited is the leading Ayurvedic product manufacture in the world. They produce
Personal care, Home care, food and health care product by its separated production unit.
The report mainly focuses and consists of formulating new strategy of Dabur; it approaches
evaluation and techniques of implementation.
It contains with six parts- Chapter one discus on the introduction of strategic planning of the
business, Chapter two has contended with the background of study, objectives, broad
objectives, and its specification, methodology, area of study, target group, data sources and
limitation of work. Chapter three contains with organization overview which is included,
company introduction, organization structure, company objectives, mission, vision, product and
service. Chapter four is the analysis and discussion, what consists with the main purpose of the
report, which is formulating new strategy of Dabur that establishing a new operation in the
Brazil. At the same time, evaluation of approaches that related to formulation strategy and
implementation of strategy that how it will make the process. In Chapter five, recommended
for the Dabur that importance they should work to develop business efficiency. And finally,
concluded in Chapter six.
Strategic planning is the roles of managing the organizational activities. It is interested about to
create strategies and influence among the business operation. The strategy is pointing out the
way of safe business running and effectiveness of business.
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Table of Content
Contents Page No.
Appendix 49
Reference 50 - 52
Bibliography 52 - 53
Chapter 1: Introduction 06
Chapter 2: Background of the study 09 - 10
Chapter 3: Organization Overview 12 - 14
Chapter 4: Analysis & Discussion 16 - 44
Chapter 5: Recommendation 46
Chapter 6: Conclusion 48
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Chapter 1: Introduction
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Strategic planning is a tool of management that contribute to the organization activities and
leads to achieving goals. It is direct to the decision making and guidance actions on it. The
success of the business relies on how individuals manage the business.
A business may not successful if it has no efficient strategy. Every business needs long term or
short term strategies to exist. In this modern era business place become more competitive and
companies are rival-ring to achieve own position.
The integrated strategy with new concepts drives business to the success. And it is showing the
way of how to challenge the barriers and overcomes. These various elements are followed by
Dabur and leading since hundred years till now.
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Chapter 2: Background of the study
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2.1: Objective of the study
2.1.1: Broad objective
� Formulation of a new strategy
� Evaluation of a approaches
� Implementation of chosen strategy
2.1.2: Specific objective
� Be able to formulate a new strategy
� Understanding approaches to strategy evaluation
� Understand how to implement a chosen strategy
2.2: Methodology
2.2.1: Area of study
My area of study is Asian Consumer Care Pvt. Limited. ACI Centre, 245, Tejgaon Industrial Area,
Dhaka, Bangladesh
Dabur India Limited, Ghaziabad, Uttar Pradesh, India
Dabur International, Dubai, UAE
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2.2.2: Target group
The main target group is the customers of Dabur range of products.
2.2.3: Sources of data
For this report mainly, I used source of secondary data like- annual report, websites,
newspaper, magazine and journal.
2.2.4: Limitation
In every work, have few limitations that face while working on. I also came through these
obstacles at the time of making the report.
The detail information of Dabur was absent on the websites, although it has a lot of
information. So it was lead to the report work less informative. On the other hand, Dabur Joint
venture partner ACI Limited was much more conservative to providing information. They do not
provide their data of internal affairs to the outsiders. To sharing details of information Dabur
was hiding bounded as well. Political instability responsible for limitation because it has made
the working process difficult to do and limit of time also one of the reasons.
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Chapter 3: Organization Overview
3.1: Corporate Information
Dabur India Limited is founded in 1884 by west bangle physician name
started to an aim with producing
leading and fourth largest FMGC manufacturer company and d
unit with Healthcare, Personal
historic long way journey and experi
thirty years. Dabur marketing
Nepal, Pakistan, Bangladesh,
3.1.2: Organization Structure
� Figure 1: Organization Structure of Dabur
Source: shin.com
3.1: Corporate Information
founded in 1884 by west bangle physician name Dr. SK Burman
started to an aim with producing Ayurvedic medicine but after long way today it turned to the
leading and fourth largest FMGC manufacturer company and doing business globally, product
Personal care, Foods and Home care goods of product. Dabur has a
long way journey and experiences of producing Ayurvedy medicine
marketing product over 60 countries worldwide and have a subsidiaries in
, Egypt, Nigeria, UAE and USA.
3.1.2: Organization Structure
Organization Structure of Dabur
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Dr. SK Burman. It was
but after long way today it turned to the
oing business globally, product
of product. Dabur has a
rvedy medicine about hundred
and have a subsidiaries in
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3.1.3: Objective
Ownership
To meet the business needs, Dabur taking responsibility and accountability.
Passing for Winning
Dabur is leader in its own area with commitment and determined to delivering best results.
People Development
Human resources are important assets of Dabur. So, they make it more voluble by training and
motivating.
Consumer Focus
Understanding the consumers’ needs and development is the challenge of Dabur.
Team Work
With mature trust and fair the peoples of Dabur work together. And handling all the treats of
the Company.
Innovation
The basic of success is continuing of innovative product and processes.
Integrity
Dabur is committed to accomplish and success in business with integrity of all stakeholders.
3.1.4: Mission
“Being a leader in the nature based health and family care Product Company”
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3.1.5: Vision
“Dedicated to Health & Well Being of Every Household”
3.1.6: Product and Service
Dabur has a range of Healthcare, Personal care, Foods and Home care goods of product.
Health care- Supplement, Digestives and OTC- Health care.
Personal care- Hair Care, Oral Care and Skin Care.
Dabur Food product range are – Real, Active, Burrst, Lemneez, Capsico and Dabur Homey.
Home care- Dazzle, Odonil, Semi Fresh and Odomos.
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Chapter 4: Analysis & Discussion
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Analyze the strategic position of Dabur by reviewing or implementing the Ansoff
matrix, growth, stability and profitability.
Formulation of new Strategy
Strategic position specifies the prospects situation of the business that relative to the present
condition. Well planned, strategies support to create better future of business. This strategic
position contains with- ansoff matrix, growth, stability and profitability.
Implementation of Ansoff Matrix
The Ansoff matrix contains with Market Penetration, Product Development, Market
Development and Diversification. This is the strategic marketing planning which concern about
the product whether that new or existing and the market situation.
Figure 2: Ansoff Matrix
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Market Penetration leads to growth of market share by offering existing product in existing
market segments. Dabur created a market penetration strategy on the product of “Hajmola
Tablet” that consume by 25 million Indian peoples and increasing level is higher every day.
Product Development refers, creating new products in an existing market. It is guided idea on
the effectiveness of new product on consumer buying behavior. Dabur is researching on sports
soap (Product development) that how new a product can contribute for effective market.
The strategy of Market Development guides to creating a new place for the existing product.
By conducting research the condition of new markets is identifies that it is favorable or not.
Dabur has taken decision on capturing wide South American market so they conduct research
on it.
Moving to the new market with new product is known as Diversification. Companies take
decision on Diversification, if business activities threatened. Though this is the risky strategy.
Sometimes, Dabur has to produce the product depend on the country and region that involve
to demand and environment. Like- DermoViva Hand Wash for USA Market.
Growth
Gaining advantages into the situation of competitive market is growth. Every business wants
growth of the business. Companies should grow bit every years in order to continue developing
business and entire year giving an effort on it. Dabur has a constant growth of their business
that showed sales turnover and revenue. In the year of 2012 sales turnover was 3,798.05 INR
and year of 2013 it was 4,349.39 INR and growing continuously in 2014 figure at 4,870.08.
Comparing with competitors Dabur has a large scale of sale Rs. 4870 core, Godrej Rs. 3581 core
and Emami Rs. 1627 core.
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Dabur take all kind of uncompromising advantages among to the competitors.
Figure 3: Graph on yearly growth of revenue of Dabur
Market Leader
A business that has gained a sound position in the specific market is recognized as market
leader. It is measured by share in the market, brand image and innovation. Dabur has marked
0
10000
20000
30000
40000
50000
60000
70000
80000
2012 2013 2014
Am
ou
nt
(IN
R)
Year
Company name Market Capitalization
(Amount in INR)
Dabur Rs. 33561
Godrej Rs. 30147
Emami Rs. 1627
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its market leadership status among to the market with significant achievements. Because they
has a higher market share and generating higher profitability. Dabur is the first ISO 9002
Certified Company.
Figure 4: Reported Profitability of Dabur
Comparing with Competitors Dabur generated higher profit in the year 2014, this graph
showing the amount of 672.1 Cr. on the other hand, its competitors Godrej has 510 Cr. and
Emami 221 Cr. The successes of Dabur are dedicated to the natural based product, healthy
corporate status, distinctive leadership and commitment. And Dabur has a hundred years of
experience of delivering quality and innovative product. So it has a strong brand image among
the customers.
Stability
In business, stability indicates continued growth of the business. Sometimes making money is
not mean that stable business, they may face, decrease of sales, loss of capital etc. In these
times of competition and technology progress it becomes more difficult to achieve market
stability. Dabur very much concerned about the stability of business operation. They make a
471.41 463.24
590.98
672.1
2011 2012 2013 2014
Net Profit
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budget, based on the market environment and using all types of marketing tools to increase
sales.
Profitability
The basic goal of the business venture is Profitability. The business will not operate longer, if
they do not generate profit. Profitability of business measured with the earnings of product
sales. Measuring present and future business profitability are important. Dabur operates a
profitable business they large number sales. And the net sales of financial year 2014 are RS.
48707, this is the massive change, then previous years. So, Dabur has a better growth in
business.
Mergers & Acquisition
In merger two organizations agree on the joint operation by sharing resources and ideas for
creating new product. It has a chance to massive competitive advantage. On the other hand,
the Acquisition is taking control over the organization. Dabur is participating in the activities of
merger and acquisition since 2005.
Merger & Acquisition brake down into three parts-
Merger
In Horizontal Merger two business firms’ combine work for their equal purpose.
Vertical Merger refers, different company come together combine to producing product. Year
of, 2007 Dabur India merge with subsidiary Dabur food Limited for the purpose of operational
efficiencies and business growth.
Conglomerate Merger is combining two different industries in same purpose.
Acquisition
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Horizontal Acquisition is when same organization acquires the same another company. It rises
in the market power of business. As a part of horizontal acquisition, Dabur India Limited first
acquires year of 2005 the leading oral and home care product manufacturer Balasara’s Hygiene
and home care product units in Rs. 143 cores.
A Vertical Acquisition occurred when business obtains the distributors and suppliers for their
own purpose. In, 2008 Dabur India acquired renowned skin care product manufacture company
fem care pharma on purpose, of entry into higher growth skin care market with established
brand name ‘fem’. Dabur acquires the brand of Ajanta Pharma ’30-plus’ in 2011. These all are
successfully Dabur made in the market. This strategy has given Dabur strong platform in the
marketplace.
Related Acquisition is gaining the firm from the related industry. Dabur India steps ahead to
overseas by acquiring Turkeys leading Personal Care Manufacturer Hobo Kozmetik - Kozletik
Group for US $ 69 Million in the year of 2010, and at the same time they also bring Namaste
Laboratories LLC under the acquisition of US $100 million.
Global Expansion
Global Expansion refers expanding business activities in the several regions, countries
throughout the globe. Although, Dabur is doing the global business they has focused on the
national market.
The three global strategies are-
The objectives of the business primarily related to the home market. Communication with
successful business activities International Strategy is needed. By developing strategy, business
has chances to increase competitive advantages. Dabur has an operation over the 60 countries.
Although they are heading to grab more international market, but they keep focused on the
home as its strategy. And they divided product range country wise to meet the customers
aspects like, Dermoviva USA Skin care for the US Market. The products are including-
Dermoviva soaps, Skin Cream, Skin Lotion etc.
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In the Multinational Strategy, businesses are taking in with the abroad market. But, it should
have effective strategies because, demand of the customers, competitions depend on the
country or region as competitive advantages as well. Dabur very much concerned about the
regional customers or country, Like- ensuring Halal product for Islamic Countries and packing of
the product as customers aspects.
Global Strategy leads business to spread up worldwide market. Dabur has global operation and
product plant. And now they are trying to entry Brazilian market to capturing whole South
America.
Carry out an Environmental audit for the Organization
Business activities rely on the environment. It necessary to study on market situation and the
business environments that how it will be efficient. Physical, Social and Competitive
Environment, this three external factors are analyze Opportunities and threats of Dabur.
PESTEL analysis is the appropriate to organizational auditing and analyzing the external factors
that impact on the business operation. It is also involved with analyzing the macro environment
of the market.
The elements of PESTEL analysis are-
The Political situation has a large number of influences in business activities. Such as, the
instability of political situation creates slow in business operation on the other hand stable
situation can be reason for profitability. The political situation of Bangladesh as turbulent as
ever. It is becoming toughest condition for the nation day by day. It has a massive impact on
business operation for leading company like Dabur. Bangladesh has survived with the political
unrest earlier 2015. Dabur must consciously toward with the business so that business may not
harm by politics.
Legal factors are law on consumer, employment and on health and safety. This factor has an
impact on business plan. Legal issues drive business in right way. Dabur follow all of these rules
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and regulation given by government. With eight hours working time daily Dabur pay their
employees and labor according to the law and motivate them for effective production. They
created safety environment of work place. According to the various categories of consumer
goods Dabur have seventeen factories across the India and abroad. The two main manufacture
units are at Baddi, Himachal Pradesh and Pantnagar, Uttaranchal. Dabur pay higher number of
taxes to the government and have an excellent brand image across the globe for their
innovative product. As leading company governments provide all of facilities they needed. So,
Dabur has no much problem except the few of political crisis.
Economic factors contain growth of economy, recession, interest and so on. These factors have
significant impact on Dabur decision making. Dabur needs to pay taxes while importing
materials from abroad. Although the amount of taxes is high, they pay that. They could provide
cheaper rate products if they get low rate of taxes facilities. Dabur has a footprint more than
sixty country on earth and production plant based on the country that demand of product.
Though, they have joint venture operations in few countries. By analyzing we can say that,
Dabur has a strong economic condition except a few of barriers sometimes they faces.
Technological factor involves to quality and innovation, product and efficient working in the
business. But it can be to shifted. Dabur has advance and computerized technologies that
provide them higher support to production activities. Sometimes it is reduced the more labor
cost. Although, Dabur has no own internet server and data store but they have a contracted
partner company to run this. And they created the best working environment by using modern
technology. Their method of working is the technology based though they have a few of paper
work which needed. Higher authorities to lower level employees always stay connected with
each other and providing support whenever they require. This is the best idea for efficient work
and save time and costs.
The aspects of the Social factors are safe environment, social well being, career etc. Society has
the biggest impact on Dabur. Dabur business also depends on the social and culture of specific
region as well as population and lifestyle. A different area or zone has various demands. Like-
Islamic countries are expecting Halal product. Dabur always focuses on it what should they
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need to do for different social and cultural behaviors peoples. They take all of advantages by
providing demanded product.
Environmental factor is a major issue for the business. It contains Climate change and weather.
Everyone expect environmental safety. These factors may create an impact on tourism and
farming. Dabur concern about the environmental issues. They always focus on the green
environment and work on it. Because their product is the natural based herbal. So they have a
very close relation with nature. Dabur also contributes to go green, they have tree plantation
activities. Simultaneously, Dabur produces few types, seasonal product for- summer and
winter.
On the other hand, Porter’s five Forces model has an influence on External environment of
Dabur. Those are the-
Threats of new entrants
In the business, new entrants appear with new competence that creates a more competitive
situation. There can be threats of new entrants for Dabur in the market. The two factors are
related; depend to the industry are- barriers of entry and response of existing competitors. For
now, it is hard task for the new entrants because Dabur has a strong position in the market and
producing supreme quality herbal product no other have.
For example: A new FMCG company name “Ginger” wants to enter the market. But it has a big
competitor like Dabur. So, “Ginger” needs to capture market place to grow the business and
this idea will be more costly for them because, firstly they will not get any cost advantages. It is
measured by the economic scale. Dabur have a good product differentiation which includes-
brand image and customers loyalty. But for the company “Ginger” it will be much difficult to
communicate. To starting a new business capital are requirements. If “Ginger” has a large
investment of capital the business will not affected. Switching costs is another factor for Dabur.
Because all are wants of less costs of raw material supply. Dabur take advantages of this. Dabur
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has developed a strong distribution channels. And they are created framework on it and
applying globally. For company “Ginger” access to the distribution channels will be challenging
and it has a risk for them. They have to think about the rules and regulation by government as
well. On the other hand, as a market leader government providing facilities to the Dabur they
needed which is long away for company “Ginger”. Finally, it showing that compete in the
market with company like Dabur is so hard. And this all demotivate to market entry.
There can be Threats from substitute products in the market for Dabur. Competitors may
provide to the customers same product that existing in the market. Dabur has skin care brand
of product name Udeva, if their competitor Emami produces a same quality skin care product,
so it will be a threat to the Dabur business. Although, Dabur has a good brand image and for
their best Ayurbedic product.
Bargaining power of customers
Customers’ wants quality product and value of their cost, they have expended. Business has to
think about the customers buying behavior and affordability of the product. So customers have
a defined high of bargaining power. There are few factors related are- Profitability owns’ by
customers. For example: If Dabur makes a low profit, they will pressurize to the suppliers to
decease the price of raw materials’.
So, it is clear that company profitability depends on the customers buying. At the same time
they expect the best quality of product they are buying. For example: If somehow customers
dissatisfied with Dabur product they can switch other competitor Emamis’ product.
Bargaining power of Suppliers
Suppliers can create a pressure on the business. They have the capability to charging to higher
price. The several factors related are- one or more dominant suppliers can change high price by
changing price level. At the same time they may have a big buyer for buying.
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For example: The suppliers of Dabur may charge a high price for the raw materials’, if this no
other has. And suppliers may have a relation to other competitors. In business suppliers has a
massive impact on activities, if they stop to supplying raw materials’ Dabur production can be
off.
Rivalry among current competitors
Every business wants to take competitive advantages in the industry and they create a
competition in the market. Dabur and its competitors like Goodrej, Amul, Emami is the market
leaders and has a competition among them and there always competition in pricing and in
advertising. They try to use unique promotional method, then each other, so that can grab a
market. Dabur has large market share, and competitors wants to beat them. As a manufacturer
Dabur has a seventeen higher capacity manufacturing unit in India and abroad. So Dabur is in a
strong position to compete in this situation with a hundred years of experience for quality
serving.
New strategy for Dabur and the stakeholder analysis while formulation new strategy
New Strategy of Dabur
Dabur is the market leader in India and has an operation on over sixteen countries across the
globe. Now they have taken strategic decision on establishing production plant in Brazil to
capture the South American market. Firstly, Dabur has to face many rules and regulation by
Brazilian government. Dabur has to follow few things as a foreign investor before and after of
setting business are-
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Law on Cash Investment,
Conversion of Foreign credit
Law of Importing Goods
Registration of Foreign Capital
Remittance of Profit – Double Taxation Treaties and
Reinvestment of Profit, etc.
On the other hand, they are getting lots of facilities if they work as Joint venture with Brazilian
Company. They can create excellent of competitive advantages simultaneously. In the market
of Brazil, absent of natural based Ayurveda/herbal Company can bring the massive advantages
for Dabur. So, Dabur decided to go to Joint venture operation with Brazilian personal and
health care manufacturer Natura Cosméticos S.A distributing through them. Name as Dabur
Natura International. As advantages now Dabur can find all of facilities from Natura and
sharing of ideas both have. Though, Dabur may not face difficulties to market entry but they
have barriers on raw materials supplies that long way journey from India. This is the big
challenge for the Dabur to forming activities in Brazil. The government of Brazil also comes
forward to setting a business because national company also involve in this operation.
[Source: Setting up your company and office in Brazil by Hector Garcia Lopez, GSM. Mobility
Magazine, April 2007]
Stakeholders Analysis of Dabur while formulating of new Strategy
The person interest on the business operation is knows as Stakeholders. The Stakeholder of
Dabur divided into internal and external.
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Internal Stakeholders
Directors are the key person for managing, implementing and oversees afire of business
operation. The responsibilities has distributed to the directors so that they can operate his own
parts efficiently. For this new strategy of Dabur Directors are strongly related with. Because
controlling of a business units depend on them. For example: director of the consumer care
unit will ensure how many piece of ‘Dabur Honey’ will produce for only Sao Paulo market.
Managers and Employees: A person who responsible for administering the employees is known
as a manager and employees are hired by an employer to do the specific task. Manager and
Employees play an important role in day to day activities of Dabur.
For the new strategy, Managers and employees work on the implementation of management
decision that has been given. Managers are distributing responsibilities into the employees, so
that the goals of the new strategy can achieve efficiencies.
They expect the job security, promotional opportunities and safe work environment form
Dabur in return they give a labor on achieving goals.
Like other, Owner of Dabur also has an interest in successful business operation and
profitability. They also attend to decision making. To set up a new business in Brazil owner of
Dabur is very much interested, because it will be profitable and add more revenue to their
business. They are concerned with creating brand value among to the customers and wants to
growth of business. Most of the business risk taken by them and put their part of life to setting
business.
External Stakeholders
Dabur has a good relation with Suppliers. As a leading company, suppliers are feeling
comfortable to work with Dabur. Suppliers provide the all needs of raw material for production.
Establishing business in new market segments Dabur needs to increase purchasing of raw
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materials. So, suppliers have a highly contribution formulating a new strategy. An objective of
suppliers’ are- wants a prompt payment and long term business relation.
A customer is the market. They expect good quality and safe product. As a leading and trusted
brand, the consumer has a higher expectation that value of spending for Dabur product. As a
new market Brazilian people may not aware about the Dabur, but through the well known
Natura Dabur can establish its brand image among to the customers.
Media are the communication tools that make a bridge between business and peoples by
delivering product information. It is vital elements for Dabur to communicate with customers of
new markets. By Participating in the promotional activities Dabur can widely spread of their
information and Medias’ are like magazines, news paper and online etc.
Society is the important stakeholder and they have directly and indirectly affect on the business
activities by Dabur. Society wants a safe environment and social welfare. The local different
organization Brazil may not support of their new business establishment or they can expect
different facilities from Dabur. Although, Dabur has an experience works on community
development, environmental conservation and so on.
Government creates a law to set up a business. The authorities provide all support for the
success of a business that contributes to increase government revenue and create
employments. For example: Dabur has paid the taxes amount of Rs.22 million and rate are 19 %
for the government in the year of 2014. To set up business Dabur has to follow many rules and
regulation given by the government. Otherwise, as a foreign company they will not allow for
that country.
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Analyze the appropriateness of alternative strategies relating to market entry,
substantive growth, limited growth or retrenchment for Dabur.
Market Entry Strategies
There are different types of strategy for developing business. Market entry strategy is one of
them and this is integrates with various tools. As mentioned in previous, Dabur India Limited is
going to work with Natura as a Joint venture. In order to take an entry advantages to the
Brazilian market this plan or strategy has been taken by Dabur.
Before to Joint venture, Dabur require to understand the situations they will face and how it
will overcome and the advantages. Dabur can take a massive advantages because absent of
Ayurveda product in the Brazilian market. And Dabur has a different range of product and
business unit, no other company have. At that situation they will get all of market
opportunities. Definitely, Dabur can create the position in the market and profitability.
Meanwhile, Dabur will be use distribution channel of Natura that has a strong image and
market position. Marketplace can be low of competition because of them. This is the marketing
advantages to the Dabur. At the same time they will get all facilities to set up facilities of
product process plant by the partner company.
Dabur can share the employees with joint company and a team of management as well. The
management personal may have a strong knowledge about the market and they are doing. The
Government may provide more flexibility of facilities because profits are sharing between two
of company and it will be contributing to the economic growth of the country. Although there
are advantages for Dabur, there can be few disadvantages they may face. Starting operation in
a foreign country can be more costly and sometimes, government may create a strict role for
foreign investors. Customers’ trust of the company may down and the managers and
employees may not be a helpful for the work and task sharing. In every action has advantage
and disadvantage, Dabur should be positive about it and keep heading.
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Organic growth
Organic growth is the method of internal development. It is the also important tools creating a
strategy of market entry. Organic growth can be supported by the company by the current cash
flow and that reason business needs no rise for extra money. There are some disadvantages of
organic growth as well. It is the process of time consuming and slow of market entry. As a
market leader Dabur can handle this barrier.
The various component of organic growths are-
Learning is the process of understanding the market by developing new product. For example:
Dabur wants to develop a new home care product, toilet cleaner name “extra active power”.
So they require to study on the market and customers that what actually customers are
expecting. This is how they should step forward with this concept.
Innovation
Long way back 130 years ago, in the year of 1884 Dabur was beginning as a small Ayurvedic
medicine store, but now it is the market leader with its innovative Ayurvedic product. Dabur
changed the history of Ayurvedic medicine. No one thought about the manufacturing of nature
based health solution product before. They walk through the human lifestyle, first with the
torch of change.
The innovations of strategy divide into 3 categories’ are follows-
Attack or leader strategies
Dabur always wants to show the innovation of their product and business action. As they
marketed Ayurvedic product no other company did before. Dabur is the first generate idea on
nature-based product packaging and marketing as well as they created strong strategies on it.
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Now they are holding position of market leader so it can be said that Dabur applied leader
strategies to reach on it.
Defensive or follower strategies
All businesses, sometimes necessary to follow defensive strategies to compete with. In the
chain of Children’s’ foods Dabur turn to the defensive strategy to compete with Emami. For
example: when Emami brand “Zandu sona Chandi Chyawanprash Plus” appears to the market
Dabur showed up defensive strategies brand of product “Chyawan Junior”. Emami offers
600gm in BDT 431 on the other hand, Dabur change the packaging and offered 550mg in BDT
380.
Counter-attack strategies
Business should be responding to the competitors by developing innovative product using
advance technology. Dabur consumer care brand “Dabur Hajmola” tablet is the traditional
Ayurvedic digestive medicine first time launched and introduce to the consumer market in
1978. Since then, Hajmola is the favorite brand consume 25 million Indian peoples everyday
and with 75% share in the market. With innovative ideas and using the latest technology,
Dabur has given the new image of Ayurveda medicine and developing day by day. Competitors
are becoming a failure to compete with. Dabur introduce market “Dabur Chyawanprash” first.
Not only this, they introduce many more products that no one imagines. Dabur set up a best
organizational environment that highly motivate to the employees.
Joint Venture
Joint Venture is strategy that helps to entry new market to the business. Two organizations are
work together on finance to manufacturing and both have equal share of the business. For
example: The Gunze United Limited is the Joint venture of United Group in Bangladesh and
Gunze Limited from Japan. By sighing agreement they joint on 50:50 ownership together for
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apparel manufacturing business in Bangladesh. As mentioned in previous term, Dabur is going
to start business in Brazil and wants to work in joint venture with Natura. They both have a
benefit on sharing profit and management. Natura has a good market position and brand image
in their home and abroad. So it will very much contribute to the marketing of product and
Dabur would generate an idea on market rapidly as advantages.
As advantages it is synergy for share management ideas, experience and knowledge. By
learning that will helps to Dabur to more internal development. Sometimes Dabur may face
difficulties of management conflict, profit and investment etc.
Licensing and Franchising
Licensing is the commercial agreements where business get something from licenser as
exchange by payment. Franchising is strategy of business that use by the company growing
market share. It is a system of the marketing that create brand image among to the customers
mind. For example: Hershey’s is a licenser that has given license to the Betty Crocker. Now
Betty Crocker is licensee and responsible to producing, advertising, marketing and distribution.
And they are doing this because they want to earn ideas, experience as well as revenue but
Hershey’s do not equipped to it. Worldwide, McDonalds Corporation has seventy five percent
of its restaurant business owned by independently under the agreement of Franchise.
Businesses are own McDonalds by payment, they are looking for gaining experience.
Substantive Growth
Related Diversification
Related Diversification is “development beyond the present product market, but still within the
broad confines of the industry, therefore builds on the assets or activities which the firm has
developed” (Johnson and Scholes, 2000).
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It occur, when business diversify in its product line. In that situation, business starts to
manufacturing new product that related to business activities.
Related diversification consists with the Horizontal and Vertical Integration. In Horizontal
Integration, business creates unit of production to output in the same industry. It is strategy of
competing in the market.
For example: If Dabur own the Home care unit of ACI Limited, it will be Horizontal Integration.
Because, these both of the company belong in the same level. As advantages Dabur can own
ACIs’ high capacity production plant. If both companies work together, they can create
different products for the market by taking effective decision. And it has potential for
increasing market power for both of them and completion will reduce.
On the other hand, if Dabur and ACI do the business together, the monopoly situation will be
created and other businesses will be surviving in the long run.
When business participates to own supplies and distribution is known as Vertical Integration.
For example: if Dabur have own a firm of bees so they will receive the supplies of Honey for
packaging. It will be supportive for business rather than sourcing of raw materials and secure of
the supplies when they want. At the same time by using own distribution system they can build
up stronger relationship with customers and large share of profit. These all are the advantages
of Dabur.
Besides, Dabur may generate less of economic scale. And they may not coordinate all of the
activities so it will be create a situation, difficulties of production.
Unrelated Diversification
In Unrelated Diversification business develops a new of product line and new market
penetration. It also known as conglomerate diversification. For example: if Dabur starts to
manufacture fashion wear, which are totally different from they are operating. It is the
unrelated diversification of Dabur.
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Advantages’ of unrelated diversifications are, by entering new industry Dabur may generate a
high profit for them. Although they are escaped from the parent business, they may use their
previous image for growing current business. These all may bring better opportunities for doing
business. As a new business Dabur may have no experience and skilled persons for managing
activities. They may fail in business operation.
Limited Growth
Divestment is the strategy that plays an opposite role of investment. It is an action of
subtracting assets of business. The decision on divestment can be taken to achieve financial
goals of business. Besides, Retrenchment is the strategy aim to reduce the diversity of
business. It contributes on cost reduction of business operation. For example: Dabur has a own
distribution channel in Egypt. So they need not numbers of employees. They can replace few
numbers of employees to the main office for participating activities there. This idea will be
reduce cost on new recruit.
Retirement is the strategic elements of retrenchment. The employee who is not enable to
participation of work is force to the retirement. Many large business organization follow this
strategy. Cutting down of employees and worker, down scaling of production and selling of
assets is a part of retrenchment. As a largest company sometimes Dabur has to go after with
this. For bringing new machineries’ they have sales all of old things. And urgent wants of cash
they also apply this strategy.
Justify of the Strategy
Dabur now concentrates on strategy they have made. They want to create a higher corporate
image. As a multinational company Dabur wants to spread up across the Brazilian market and
entire South American market in near future. By joint venture with Brazilian Cosmetic Company
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Natura, Dabur wants to start operation through their channels. It is the most attractive way of
sharing risk and cost, creating a scale of economy. So, this is all the market entry strategy
Dabur is going to follow. Natura has a good brand image in its own country and abroad. So, it is
greater chances to make a profitable business operation. Dabur is ready to invest in setting up
in perfect place of business and they have experienced employees and representation across
the globe.
Dabur is applying innovative promotional tools for product market. Work together with Natura
it will carry a large impact on the promotion of the product. As a colorful, festive country, Dabur
can participate in a role of sponsor in Brazil for creating brand image among the people.
Though, Dabur have no operation in South America, but they have activities in Middle American
country US. So it may help them to understand on the entire American market and reasons of
formulating this strategy. Because, the bigger opportunity is present.
Most of the American counties rules and regulation are same, so experience of working in US
will highly support them. Dabur has capability to face any type of challenge and filling up of
customers’ demands. Successful of business will bring a big amount of capitals.
Dabur is well known globally. They have an impressive growth of business and new strategy will
be more effective at it. Customers are satisfied with the efficient product, service and happy life
daily. This all the reason that Dabur heading with a new strategy. Because they know they can
hit their goals.
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Asses the roles and responsibility of the people who are charged with strategy
implementation and analyze the estimated resource requirements for implementing
your new strategy.
Role of Leadership in Strategic Implementation
The vital part of Strategic leadership is sharing clear vision and values that allows employees to
take decision on control mechanism. A leader has a greater capacity of vision to changing
business environment simultaneously.
As we explain the roles of the leader can be-
Introducing of Change: Organization much more necessary to get change in development and
growth. The new idea on technology, decision making and creating new market which are bring
change to an organization. Dabur very causes on changing, they like to change and showing to
the changing. For example: Dabur introduce to the market “Dabur Hajmola” that never given
experience for customers. They changes consumers expects by providing this.
Interest on internal conflict: An organization consists with types of various peoples that are
teams, department and units. So, at the working time conflict can be arising between them. At
that circumstance leaders are needs to heading by showing interest to solve this. The
employees of Dabur have a good understanding among them and higher authorities created
this situation into the employees. They are very much concerned about existence of peace.
Developing Ability of Leadership for Managers: To run the business efficiently managers are
require to be an effective leader. Because, most of time he manage the employees on the way
of organizational objectives. So, more training must needed for ability to it and then they could
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contribute to solving internal conflict. Dabur think that, skilled person are important resource
for the organization. They are very much focus on the development of the employees by
training.
Development of Organizational Environment: Organizational environment is the elements of
factors surrounding to an organization that includes- value, belief and norms. It effects to an
operation and its resource. For the effective management it needed to study on organizational
environment. Well formed organizational environment gives unique identity to an organization.
� It is integrated with psychological, social and culture.
� It involves of goals and objectives.
� Long time stability
� It helps to create good image among to the customers.
To create the favorable environment of organization the certain policies and practice must
adopt by the management are-
� Delivering higher standard of excellence in area of work.
� The standard of moral character need to be high.
� Encourage to employees for generating innovative ideas.
� Responsibility of delegation though out the organization.
The higher authority of Dabur committed to delivery their best for the organization and has a
respect on principles of ethics. Dabur are strictly maintaining this manures’.
Developing of Motivational System: Every person of an organization deserves the motivation.
The process of motivation that leadership must require to understand.
Every working person has a certain needs, after getting they become motivated. For example:
Managers are expects higher salary, proper respect and yearly leave. On the other hand
employees need to increase of their salary. Everyone gives their efforts on purpose of achieving
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something they need. And then efforts lead as performance. Authorities are recognizing
performance by reward. Dabur motivate their employees for higher productivity. Based on the
performance they recognize those person who given effort on the work which include increase
of salary and promotion.
Clarity of Goals: The main goal is to creating strategic leadership. So, it is includes with-
introducing change of an organization, interest on internal conflict, developing ability of
leadership for managers, developing organizational environment and motivational system for
the employees as well as, maintaining relation and styles of leadership.
Relations: Maintain good relationship between higher management and subordinated that
improve the interpersonal relation to each other. This idea drives to the dawn of any task in
time by the subordinates’. For examples: Dabur has developed better internal environments
that are good relationship with each other of higher management and employees. Meanwhile,
they aware about the relation with client and investors. The company, encourage them with
various ways that makes more effective relation among them.
Leadership Style
Leadership is the ability to leading of an organization. Ability is the key of leading person as well
as set up clear direction and vision of the organization. An organizational activity depends on
which type of leadership style they comply with.
The types of leadership style are - Autocratic, Bureaucratic, Consultative and Situational.
Autocratic Style: A leadership style characterized by the individual control total authority and
decision making. Typically, autocratic leaders make decision by own ideas and rarely judgment
or advises from followers.
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� Decision making from higher level and they are the responsible for all
� No consult with sub-ordinates
� Formal relation between higher level and subordinates
Bureaucratic Style: Bureaucratic leadership connects with the complicated rules of the
institutions and responsibilities abide by them. In this circumstances, most of the important
decisions taken by higher officials. Bureaucrats are trying to best use of their ability. It is mostly
happened in the governments departments.
� Bureaucrats do not consult with subordinates and they avoid responsibility.
Consultative Style: This is the participative leadership, where a number of individuals involve to
decision making process. This type of leadership encourage to discussion and share ideas. It is
leads to the contribution of peoples to make a powerful decision and increase productivity.
� Higher authorities consult with the subordinates before decision making
� Suggestions from subordinates
� Superiors informal relation with subordinates
Situational Style: This leadership styles depends on the situation that they need to act like. So
it’s sometimes, autocratic, consultative and participative. These all take place based on the
condition of work.
Study on the organizational style of Dabur, they using Democratic leadership style. They make
an open discussion between them by participating members of different departments or teams
to decision making. Participation makes their decision stronger which, reflect on the work.
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Estimated Resource for new Strategy
Establishing new Operation Company needs to estimate on require resources. Without
insufficient resources business operation could not be effective. In order to effective business
operation, it is requiring to adequate resource. And efficiency of utilize resources that to
generate more revenue and creating brand image among into the market space simultaneously.
The Partner of Dabur and Natura has an enough resources and ideas to operate new business.
The vital resources of their business are-
Finance
In business, finance play important role and it is the life of day to day activities. As a market
leader Dabur has strength of finance and its partner Natura as well. For establishing a new set
up, Dabur estimated about US $30 million primarily. They want to head very carefully to
achieving goals. On the other hand, Natura has a enough resources that both can utilize for the
business activates like- NASP, Natura Tower, situated in Sao Paulo and they have a larger own
plantation which would be effective for them.
Human Resource
To run an efficient business operation a good teams of employees are needed. Dabur and
Natura both have a skilled professional person for operate and both have a strong management
team as well. Dabur wants to shift their few of experience person for operation in Brazil and
skilled worker will hire from Brazil according to the contract.
Raw Material and Physical Resource
In order to produce an Ayurvedic product Dabur needs to provide raw materials which will most
of the supply from the India because Dabur product will be distributed through Natura
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consumer care unit. The important point for the Dabur is trying to sourcing more raw materials’
because it has a large effect on new market. Meanwhile, Natura has a large space for operating
of business activities in Natura Tower, Sao Paulo. And for the processing of product they look
side on ABC Region (Industrial Region of Brazil) in Greater Sao Paulo. As National Business in
Brazil, Dabur gets all kinds of facilities from Natura.
Time
As a market leader Dabur has a reputation and punctual about time. They are concerned about
just in time of product manufacture and delivery. Except the big technical problem they never
compromise to the time. Dabur and their suppliers are highly committed to keep business on
track.
Work on the joint venture with Natura, Dabur set a one year of timeline, which is start from July
2015 to Jun 2016.
July – August Signing on final contract with Natura and set up of
business activates.
September – October Set up of activates and Launching of Joint venture
Company “Dabur Natura International”.
November – December Starting the operation and promotional Activates.
January – February Advertising and Distribution.
March – April Using wide range of Distributional Channel and
continue of using promotional activities.
May – Jun Customers’ feedback and development.
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Evaluate the Contribution of SMART
Setting future objectives for the business SMART is the useful tools to filter the condition. The
SMART Represents-
Strategy is the vital for an organization to creating the framework to reach its vision and gaining
on it. It drives on the strategic way to building goals systematically as well as the decision
should be depend on analysis of the situation and define the development of targets. For
example: The strategy set by Dabur is to starting new operation in Brazil, purpose of capturing
entire South American market in near future. And in Latin American market absent of Ayurvedic
product so, this is will be highly supportive to them to achieving their vision. But decision
should be systematically and analyzing of market that how product would be effective.
Depends on this target should be develop.
It is harder to Measuring organizational goals. We usually concentrate on what can measure.
Reminding daily about goals is the best practice to concentrating on the targets that has been
taken to achieve. For example: Dabur require posting their goals on the board that can see the
employees daily to make more aware about their work that have to accomplish.
Attainable
Goals split into three parts-
Strategic Initiative Goals are the strategic goals that are needed to review and study on. And it
leads to implementation of it. Implementation of Goals are depends on the strategic initiative
goals. After setting goals, management are makes an action plan of implementation. Long
Range Goals are to keep focusing on the goals, although implementation plan is not ready.
For example: Strategic Initiatives, Goals of Dabur, which is setting up a business in Brazil. So
they conduct research on the whole South American market that it has high demands or not
and profitable issues. Although herbal and Ayurvedic product is not present in the market.
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Based on the positive result this strategy will be implemented. Before going ahead with this
decision Dabur had a long range of goals to spread up their business globally.
Relevant
The environment of the business drive to the achievement of goals. Business may have desire
of increasing profitability but it would not be relevant to the market because of recession and
competitors. For example: Dabur expecting to generate 10 percent of more profit from
Bangladeshi market, but the political situation makes business harder to accomplishing its goals
and other competitors are lessees their prices to achieving market share. In the market, very
much competitive situation among to the businesses. So, sometimes it is become tough to
achieve goals.
Time-bounds
Every business goal has a time frame and they are toward along with that. It supports to
accomplish mission otherwise unlikely to achieving of task. For example: Dabur structured time
frame for doing business in the Brazilian market and they estimated time one year which is
includes- promotion, distribution and development. Within this time they want to head
smoothly to capture market. Higher management of Dabur has estimated budget on it that will
be support for activities.
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Chapter 5: Recommendation
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It is already known that Dabur has a hundred years of tradition and experience. So, there is no
doubt that about success and reputation.
Dabur has to cross over many obstacles till now though they sit in this position.
By evaluating the overall company, few things are light up that Dabur should concentrate for
their better future. The succession of management should leave on the best executives rather
than family management. Dabur has to have more conscious about product pricing, because
its competitors are always wanting to beat him by using different strategies. Leading the
market, balance into price is an important section.
A sales team with appropriate skills in response the wants of modern trade is major factors.
Increase of modern distribution strategy and modern trade stockiest in the every town to serve
the stores. Ensuring continues supply of product through distribution channels and large
national chain. It requires concentrating on urban market and ensuring product distribution in
entire urban area. Because most of the business capital relies on it.
At this time, mostly health care product driving to the natural base. So day by day competition,
rising among to the companies. Dabur must be griping their position that no other can take the
advantages by beating them.
In this modern civilization of Information Technology leads to successful business.
Unfortunately Dabur sourcing from outside the company rather than having IT section to
operate online activities. Outsourcing can be threats on data protection because outsiders
accessing on it. So their company internal afire, tactics’ and other important plan may flush out.
For that reason Dabur should build up IT department for a safe business run.
Lastly, as a leader Dabur can take right decision efficiently and effectively. Although everyone
sometimes miss the track, so Dabur should carefully overcome it.
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Chapter 6: Conclusion
48
Strategy is the skeleton of the business organization. It plays a vital role for success in the
competitive advantages. A company must have efficient strategic planning for a successful
business. A powerful strategic decision makes Dabur activities superior and made competitors
difficult to compete with. It has delivered services with their best efforts and experiences that
makes to reach their position of leader. Although, Dabur has a few limitations of work which
should to be developed. Sometimes, Business profitability also depends on the strategic
efficiency. So, it is the important fact.
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Acronyms
INR – Indian Rupee
GDP- Gross Domestic Product
Appendix
50
Reference
AnsoffMatrix.com. 2009. www.ansoffmatrix.com. [ONLINE] Available
at: http://www.ansoffmatrix.com/. [Accessed 27 January 15, 07:00 AM].
Bloomberg. 2014. http://www.bloomberg.com/. [ONLINE] Available at: