"The Rise of NOKIA”

The cellular telephone industry is one of the great growth stories of the 1990s. The
number of cellular subscribers has been increasing rapidly. Three companies currently
dominate the global market for cellular equipment (cell phones, base station equipments
and digital switches) Motorola, Nokia and Ericsson. Of the three the dramatic rise of
Nokia is perhaps most surprising.
Nokia's roots are in Finland, not normally a country that jumps to mind when we talk
about leading edge technology. Back in 1980s, Nokia was a rambling Finish
Conglomerate with activities that embraced tire manufacturing, paper production,
consumer electronics and telecommunication equipment. Today it is a focused $10 billion
telecommunication equipment manufacturer with a global reach second only to that of
Motorola and with sales and earnings that are growing in excess of 30% per annum. How
has this former conglomerate emerged to take a global leadership in the cellular
equipment industry? Much of the answer lies in the history, geography and political
economy of Finland.
The story starts in 1981, when the Nordic nations got together to create the world's
first international cellular network. Sparingly populated and inhospitably cold, they had
good reasons to become pioneers. It would have cost far too much to lay down a
traditional wire line telephone service. Yet the same features, that made it difficult, make
telecommunications all the more valuable there. People driving through Arctic winter and
owners of remote northern houses need a telephone to summon help if things go wrong.
As a result Sweden, Norway and Finland became the first nations in the world to take
cellular communications. Seriously. They found, for example, that while it cost up to
$800 per subscriber to bring a traditional wire line service to remote locations in the far
north, the same locations could be linked by cellular service for only $500 per person. As
a result, in 1994, 12% of the people in Scandinavia owned cell phones as compared to 6%
in USA.
Nokia as a long time telecom equipment manufacturer was well positioned to take
advantage of this development. Other factors also helped Nokia. In Finland there has
never been a national monopoly. Instead there had been 50 odd telephone service
providers, whose elected boards set prices 'by referendum (which results in lower prices.)
This army of 50 telephone providers has never allowed Nokia to take anything for
granted. The finish customer always buys from the lowest cost supplier, whether it was
Nokia, Motorola, Ericsson or anyone else. Nokia has responded to this competitive
pressure very well while driving down costs relentlessly and being always at the cutting
edge of technology. Nokia is snapping at the heels of the number one firm in cellular
equipment - Motorola. In digital cellular technology-supposed to be the wave of the
future - it is Nokia and Motorola, which is the tech leader. The Scandinavian countries
have started switching to digital cellular technology five years before the rest of the
world. Nokia has now the lowest cost structure for any cellular equipment in the world.
The result is that it is more profitable than Motorola.

Answer the following questions:

a) What are the reasons for Nokia's success?
b) What is the strategy adopted by Nokia?
c) Suggest a suitable strategy for Motorola.

INTRODUCTION

Marico is a leading Indian Group in Consumer Products & Services in the

Global Beauty and Wellness space. Marico's Products and Services in Hair
care, Skin Care and Healthy Foods generated a Turnover of about Rs. 23.9
billion (about USD 478 Million) during 2008-09. Marico markets well-
known brands such as Parachute, Saffola, Sweekar, Hair & Care, Nihar,
Shanti, Mediker, Revive, Manjal, Kaya, Aromatic, Fiancée, Hair Code,
Caivil, Code 10 and Black Chic. Marico's brands and their extensions
occupy leadership positions with significant market shares in most
categories- Coconut Oil, Hair Oils, Post wash hair care, Anti-lice Treatment,
Premium Refined Edible Oils, niche Fabric Care etc. Marico is present in the
Skin Care Solutions segment through Kaya Skin Clinics (101 in India,
Middle East and Bangladesh) and its soap franchise.

Marico's branded products are present in Bangladesh, other SAARC

countries, the Middle East, Egypt, Malaysia and South Africa. The Overseas
Sales franchise of Marico's Consumer Products (whether as exports from
India or as local operations in a foreign country) is one of the largest
amongst Indian Companies and is entirely in branded products and services.
HISTORY
The company was originally a join venture between a Lever group
company and Nissin of Japan, and its products were distributed through In
1988 The Company was incorporated on 13th October, under HLL's
channels. the name of Marico Foods Ltd. It obtained the Certificate of
commencement of In 1989 The name of the Company was changed
to business on 22nd November. In December, the Company Marico
Industries Limited w.e.f. 31st October. entered into an agreement with M/s.
Rasoi Industries Limited for purchase of its Saffola won the Most unit
located at M.I.D.C Industrial Estate, Jalgaon. Outstanding `Brand of the
Year' Award instituted by the Advertising Club of In March 1996, the
Company made a fresh issue of 10,00,000 Mumbai in 1993. equity shares
of Rs.10/- each, at a premium of Rs.165/- per share, simultaneously with an
offer for sale by the promoters of 26,25,000 equity In 2002 Marico shares
of Rs.10/- each, at a premium of Rs.165/- per share. Industries Ltd has
informed BSE that the Board approved the Issue of bonus redeemable
preference shares of aggregate face value of Rs 290 million. Ratio -- 1:1 on
equity enhanced after bonus issue of equity shares made by the Board on
April 18, 2002 and approved by shareholders on July 18, 2002. The rate of
dividend is 8% p.a.Increase in authorised share capital of the Company from
Rs Marico acquires HLL`s Nihar for Rs 216 cr in 300 million to Rs 600
million. In 2007 Marico Ltd has appointed Mr. Anand Kripalu as an
Additional 2006 NonExecutive Director on the Board of Directors of the
Company.

PRODUCTS

Saffola

Hot Oil

Hair & Care

Nihar

Shanti Badam Amla

Mediker

Caivil
VISSION AND MISSION

'COME WIN' ---- their vision and mission is captured in this acronym,
which when
bifurcated means the following: -

Consumers: For they are the reason we exist.

The primary focus of our efforts will be to not only understand what adds
greatest value to the consumer but also change and reinvent ourselves if
need be. We will translate the consumer's needs and desires into marketable
products and an everexpanding base of loyal consumers, with speed and a
quality of response that surpasses the competition.

Membership: For a sense of ownership empowers us.

Wholesome membership is when a person brings his/her entire being into
the organization. It also gives each member a role in articulating and shaping
the destiny of the organization, which in turn, builds commitment and
ownership.

Excellence: For it unleashes our potential.

We will focus on policies and practices where people produce consistently

superior performances and where people are encouraged to discover their
untapped potential.

Wealth: For on it hinges our growth.

All our efforts must culminate in the creation of wealth. We will do so by
continuously adding value in everything we do through a variety of methods.
We will use sources productively, eliminate waste, reduce cycle times and
costs and enhance the consumer base.

Innovation: For it gives wings to ideas.

The future of our organization rests on our willingness to experiment, push
in new and untested directions, think in uncommon ways and take calculated
risks. Continuous improvement should be a part of everyday work. We
acknowledge that failure is inherent in any new initiative. We will commit
resources for experimentation and invest in processes for reviewing and
sharing of learning.

Marico's Goals and objectives (which they wish to achieve by 2010)

We commit ourselves to improving the quality of people's lives in several
parts of the world, through branded fast moving consumer products and
services.

SWOT ANALYSIS

Before going to the Marico Company’s SWOT Analysis we must understand

which things are included in the SWOT analysis;

SWOT Analysis of Marico Ltd.

Various Environmental Analysis

Strategic Advantage Profile (SAP)

Introduction
A competitive advantage is an advantage over competitors gained by
offering consumers greater value, either by means of lower prices or by
providing greater benefits and service that justifies higher prices.

Concept of Competitive Advantage

"Competitive advantage exists when there is a match between the distinctive
competencies of a firm and the factors critical for success within its industry
that permits the firm to outperform competitors." It concludes, then, that
competitive advantage is externally focused while organisational
competence is internally focused. Therefore, an organisation's competence
does not automatically lead to competitive advantage. This phenomenon can
be explained by two situations:
1. The core competence of the organisation may not be of any importance to
the

industry in which the organisation is operating. There are numerous

examples of this phenomenon; organisations diversifying into non-core
competence areas, failing therein and divesting such business. Metal Box,
having core competence in packaging materials, diversified into bearing and
had to divest it, and so on. 2. Even if core competence has relevance in the
industry segment, other competitors may have the same strength and the
particular organization may not have any competitive advantage. What
becomes, then, important for the organization is to have relatively greater
strength in that important factor than its competitor, For example, two
competitors may enjoy low manufacturing costs; but one with the lower
manufacturing costs has a competitive advantage.
Competitive Advantage Profile: A Case of MARICO

India’s fast moving consumer goods (FMCG) sector is the Marketing

Factors fourth largest sector in the economy of India with a total market size
in excess Many giant players, both foreign as well as domestic, are of
US$ 13.1 billion. Marico Company a leading competing in the market
with a view to capture it. Indian FMCG Company having excellent
distribution channel and deep rural reach Marico and especially for having
efficient distribution channel, in India. Satisfaction Level of Retailers on
Various Products as well as other micro  Parameter's plays a vital role
indentifying the flaws and merits of Marico. Brands – quite Renowned
Brands like Parachute, Saffola, and Kaya Skin Clinics. Physical
distribution for Strong in inventory control (28 days).  powerful. Size
advantages in relation to superior to competitors. Production Factors
Finesse in production planning, scheduling, and matching
with competitors. In house production – no outsourcing –
high marketing requirements. India and foreign reliability suppliers –
superior quality assurance. Human resources high calibre.
Finance production location – spread benefit. A Turnover of about
Rs.13.6 billion (about USD 380 Million) during Factors CAGR of 13% in
turnover, 15% in profits - over last 5 Cash rich.  2008-09. years

Competitive Advantage Profile: A Case of MARICO (Descriptive Form)

Capability Factors Finance Marketing

Competitive Strengths & Weakness High cost capital, reserves & surplus
Various Products, Domestic and Foreign market gainer

Operation personnel

P&M excellent – parts & components available Quality management &

personnel par with

competition

ENVIRONMENT THREAT AND OPPORTUNITY PROFILE (ETOP)

Environmental scanning usually refers just to the macro environment, but it

can also include industry, competitor analysis, marketing research
(consumer analysis), new product development (product innovations) or the
company's Economy¬internal environment. Macro environmental scanning
involves analysing: Socio-cultural¬ Potential Suppliers ¬ Technology ¬
Legal ¬ Government ¬

Economy
economic growth GDP per capita 

 consumer and investor confidence  inflation rate  unemployment rate

  merchandise trade balance  currency exchange rates  inventory
levels  balance of payments  financial and political health of trading
partners future trends

Government
 political climate - amount of government activity   budget deficit or
surplus  government debt  political stability and risk  import tariffs
and quotas  payroll taxes  corporate and personal tax rates restrictions
on international financial flows export restrictions

Legal
worker environmental protection laws  minimum wage laws  laws
that municipal licenses  Sunday closing laws  union laws  safety
laws favour business investment

Technology

Efficiency of infrastructure, including: roads, ports, airports, rolling

stock,

hospitals, education, healthcare, communication, etc.

industrial new products and services of new manufacturing processes
 productivity any new new products and services of supply chain
partners  competitors cost and accessibility of electrical technology that
could impact the company power

Potential suppliers
Labour supply o o o o o o o
quantity of labour available quality of labour available stability of labour
supply wage expectations employee turn-over rate strikes and labour
relations educational facilities

Material suppliers o o o o

quality, quantity, price, and stability of material inputs delivery delays

proximity of bulky or heavy material inputs level of competition among
suppliers

Service providers o o

quantity, quality, price, and stability of service facilitators special

requirements

Socio-cultural

Demographic factors such as: o o o o o o

population size and distribution age distribution education levels

income levels ethnic origins religious affiliations

Attitudes towards: o o o o o o

materialism, capitalism, free enterprise individualism, role of family, role of

government, collectivism role of church and religion consumerism
environmentalism importance of work, pride of accomplishment

Cultural structures including: o o

diet and nutrition housing conditions

Scanning these macro environmental variables for threats and opportunities

requires that each issue be rated on two dimensions. It must be rated on its
potential impact on the company, and rated on its likeliness of occurrence.
Multiplying the potential impact parameter by the likeliness of occurrence
parameter gives a good indication of its importance to the firm.

ETOP MATRIX OF MARICO COMPANY

Environmental factors
Degree of importance High (3) Medium (2) low (1) High ±3

Degree of impact Medium ±2 low ±1

Economic Inflation rate Economic growth Consumer and investor

confidence Legal Minimum wage laws Budget deficit or surplus
Environmental protection laws Technology Cost and accessibility of
electrical power Industrial productivity 3 -2 3 +3 3 1 +3 -3 2 +1 1 -1 3 1 -3
+1 -

ORGANISATIONAL CAPABILITY PROFILE (OCP)

OCP is a summarized statement which provides overview of strengths and

weakness in key results are as likely to affect future operation of the
organisation. Information in this profile may be presented in qualitative
terms or quantitative terms. Where the information is presented in qualitative
terms, strengths and weakness described in the form of narration. However
these narrations do not show the degree of strengths and weakness.
Quantitative presentation of strengths and weaknesses solves this problem.
In the quantitative presentation, all the factors appraised are assigned
degree/values along a scale. Such values may be on 5 point scale with 5
denoting the highest value and 1 denoting the lowest value of strengths and
weaknesses. The values that are assigned to a factor are subjective
depending on the perception and judgment of appraisal. Such an exercise
may run into several pages depending upon the factors appraised. After the
preparation of OCP, the organization is in a position to assess its relative
strengths and weaknesses vis-a- vis its competitors. If there is any gap in any
area, suitable action may be taken to overcome that.

Financial capability factors of MARICO Company

 Cash management  Low investor confidence Decentralized
collection  Centralized payment

Marketing capability factors of MARICO Company

Distribution Fixed Low promotion  Low company image  Wide
variety of product  channel price

Operation capability factors of MARICO Company

Plant location as per raw materials availability
 R Absorb imported technology  & MIS system of D system is so
good operation and control system

Personnel capability factors of MARICO Company

Good personnel Good industrial relation with other company system

Summarized form of OCP

OCP Weakness Normal (0) Strengths (- 5) Financial capability factors
(+ 5)

a. Source of funds and cost b. Usage of funds c. Management of funds

0-

32

Marketing capability factors

a. Product related b. Price related c. Promotion related d. Distribution

related

-1 -3 -

51

Operation capability factors

a. Plant location

b. Production system c. Operation and control system d. R & D system

0-

235

Personnel capability factors

a. Personnel system b. Organisational and employee characteristics c.

Industrial relations d. Quality and motivation of personnel

12
0-

THE BOSTON CONSULTING GROUP’S GROWTH-SHARE

MATRIX (BCG)

BCG Matrix Include; 1. Stars are high market share/high growth businesses.
The preferred strategy is growth.
2. Question Marks are low market share/high growth businesses. The
preferred

strategies are growth for promising question marks and restructuring or

divestiture for the other question marks. 3. Cash cows are high market
share/low growth business. The preferred strategy is stability or modest
growth. 4. Dogs are low market share/low growth businesses. The preferred
strategy is retrenchment by divestiture.

BCG MATRIX OF MARICO

STAR
It is represented by a SBU or a product having high relative market share
and high market growth rate. It need capital over and above its cash flow to
maintain it’s market share. However in may be self sustained in terms of
cash flow when it is established and beginning to mature ultimately it
becomes cash cow, on maturity, because it cannot absorb further cash. It
cannot absorb further cash; it provides cash for growing stars. It suggested
Expansion Strategy for STAR E.G. KAYA SKIN CARE AND
PERACHUTS COCONUT OIL IN MARICO AND IN THE INDUSTRY
HLL AND GODREJ COMES IN THIS CATEGORIES. These product is in
STAR but there cash flow will be less it will be become cash cow because
there use full all over the world.

QUESTION MARK
It represented by a SBU /Product having low relative market share and high
market growth rate I.E low market share in a growing market. It requires
large cash due to market growth, but generates less cash due to low market
share.It requires additional investment to increase it’s competitive advantage
or divestment.

E.G NIHAR, SAFFOLA (FUNCTIONAL OIL) AND IN THE WHOLE

INDUSTRY DABUR COMES IN IT. These product company given more
advertisement. Because these product not more popular in the market. So
company given more cash to these product.

CASH COW
It represent by a SBU/Product having high relative market share and low
market growth rate. It generates substantial cash over and above it’s
investment requirement. It may be a SBU/Product in maturity life cycle
stage. It is not attractive in long ran due to less market growth rate to meet
the investment need of stars on question marks, over heads and growth
strategy is suggested. E.G SAFFOLA (EDIBLE OIL), SILK N SHINE AND
IN THE ABOVE EXAMPLE ITC COMES. These product market share is
high but there market growth rate is low because there competitor is so much
in market. In the market SAFFOLA OIL competitor is so much like as
FORCHUN OIL , DARA OLI etc.

DOG
It represents a SBU/Product having low relative market share and low
market growth rate. It has very low competitive position due to high costs,
poor quality ,poor marketing etc.It also has low growth potential due to low
market growth rate. It does

not generate enough cash even for its own continuity. So Retrenchment
Strategy usually by divestment or liquidation is suggested. It may be in the
declining stage of its life cycle. Government policy may retain a dog
artificially.

E.G MAHA THANDA AND IN THIS EXAMPLE MARICO COMES

These product in market so very people know and there marketing is so less
to other product of company. This product competitor is NAVRAT COLL
DABAR Etc.

GE NINE-CELL MATRIX McKINSEY & Co

This matrix follows two dimensions;

Industry Attractiveness
Industry Market Size and growth rate  Capital requirements etc.
Political Factors  Seasonality  profitability
Business Strength
Relative price, service Relative Market Share  Knowledge of
Customers & Financial Resources Markets

HIGH MEDIUM LOW

HIGH 1 3 5

AVERAGE 2 4 8

WEAK 6 7 9

Cell 1:

It has high business strength and strong Industry attractiveness. It is

suggested the growth strategy. In long run other players may be attracted and
Industry attractiveness reduces. E.G: Like as parachute is more
attractiveness but now there competitors are so much but there attractiveness
is same as earlier.

Cells 2:
It shows average business strength and high industry attractiveness. So it
suggested growth strategy by building up of business strength. But if it does
not happen it is dangerous. E.G: Like as Parachute Advanced Oil
attractiveness is high but there competition of

this product strength is average because in the market parachute Oil is sold.
So that here, only company change name. The product attractiveness is so
much but here product strength is average.

Cells 3:
It has High Business Strength and attractiveness is medium. Here growth
Strategy suggested. E.G: Like as NIHAR and SILK N SHINE strength is
high but there attractiveness is medium because their competitors is so much
in these product.

Cell 4:
It has business strength is average and attractiveness is medium. It will be
hold and continue to earn. It say Suggested Stability Strategy. E.G: Like as
SAFFOLA (OIL) there both are average but in the market there are
many products is strong to compare to SAFFOLA.

Cells 5:

It has high business strength and Low attractiveness of Industry can grow by
neither vertical integration nor diversification where its strength can be
utilized. Otherwise, it should be continued to harvest profit.

Cells 6:
It has high attractiveness of industry but low business strength. It suggested
stability and growth for business strength. It may continue to earn in
attractive industry or improve its strength and grow or if it is not possible its
divest.

Cells 7 & 8:
In the res zone suggest harvestmen or turnaround strategy .

Cells 9:
It is least attractive and weak, so immediate is suggested.

STRATEGIC BUSINESS UNIT

Marico’s Strategic Business Unit

Consumer Products Business:

Over the past 17 years, Marico has been continually improvising and
building new brands. Marico's Consumer Products Business houses well-
known brands such as Parachute, Saffola, Sweekar,Hair & Care, Nihar,
Shanti, Mediker, Revive, Manjal, among others, which occupy leadership
positions with significant market shares in most categories- Coconut Oil,
Hair Oils, Post wash hair care, Anti-lice Treatment, Premium Refined Edible
Oils, niche Fabric Care etc. Every month, over 70 Million consumer packs
from Marico reach approximately 130 Million consumers in about 23
Million households, through a widespread distribution network of more than
2.5 Million outlets in India and overseas.

International Business Group:

The International Business Group of Marico operates in more than 20

countries spread across Asia, Middle East and Africa and has manufacturing
facilities in Egypt, South Africa & Bangladesh. The International Business
group has witnessed phenomenal growth over the years and contributes to
25% of Marico’s turnover. The company has full fledged operations in
Egypt, South Africa, Middle East and Bangladesh. In addition, the
International Business group is actively involved in creating opportunities
for future growth and has enabled our brands to be present in many other
markets across the globe.

Kaya:

Kaya Ltd (erstwhile Kaya Skin Care Ltd.) was an entrepreneurial leap of
faith marking Marico's entry into skin care solutions business. It was a true
reflection of uncommon sense for a company in hair care products to move,
instead of merely logical product extensions, straight into skin care services.
It attempted to leverage Marico's strengths in the Personal Care business and
in-depth understanding of the needs of the Indian consumer and her/his
desire to enhance her/his natural beauty with the best cosmetic dermatology
procedures available internationally.

Kaya Ltd. has been focused on meeting the emerging needs of the modern
day consumers by providing useful and effective services in the beauty and
wellness space. The pioneering effort has been in the area of skin care with
Kaya Skin Clinic.

Over the last 7 years Kaya Skin Clinic has refined the standards and
professionalisms of the skin care industry through innovative, world class
treatments and services that have been tailor made to suit Indian skin.

Kaya Skin Clinic

The philosophy at Kaya is governed by the single value of placing the
customer first at all times. The emphasis, therefore, is to offer personalized,
world-class skincare treatments and services, most suited for Indian skin, in
a zen like, state-of-the-art clinic. Since its first prototype in Bandra in 2002,
Kaya Skin Clinics has grown at an unprecedented pace, with over 100
clinics in India, Middle East and Bangladesh.

Kaya Services
Kaya has a host of services that will help you attain, regain, preserve and
protect the intrinsic beauty of your skin. All this is offered in serene, zen like
ambience, under the reassuring care of dermatologists and experienced skin
practitioners, to aid you to easily look your best, always.
Skin Beauty Services:
Kaya Glow Skin polishing and brightening   Kaya Advanced Facial
 Skin Lightening Peel  Meso Glow  Kaya Back shine  Kaya
Express Glow

BUSINESS LEVEL STRATEGIES

1. Cost Leadership Business Level Strategy

In company attains there competitive advantages & Increased their market
share by offering products and services. Company offering product and
services having the same utility, utility features as competitors’ products and
services. Company substitute products and services; but the price lower than
their competitors. Because of its core competence in engineering, design,
manufacturing, distribution etc.When there is price elasticity of demand i.e.
positive co-relation between price reduction and demand.

Cost leadership is achieved by Marico Company

Early entry in¬ High¬ High capacity utilization. ¬ Accurate demand
forecasting. ¬business. Aiming at¬level of standardization of products and
uniform services packages. average customer by giving generalized set of
utilities & thereby attracting Price¬ Conditions For Cost Leadership Being
Successful Are As ¬more customers. based competition is so severe that
cost becomes an important factor.

Buyers are¬ Buyers are price sensitive and low price attracts more buyers.
¬ There are very few ways of¬many and have bargaining power for price
reduction differentiation and it is not important to customers.

Advantages of Cost Leadership Are As Following:

In company it¬ ¬protection against competition if a company make lower
structure of products. There is less effect because powerful suppliers
bargain for high price so that It serves as entry¬such price rise to better
absorbed in low cost structure. barrier to new company which can not
produce at lower price.

Company has so many products so that company use these strategy for there
product market share increase in market. If company not use these strategy
for there product company not sell there product in market because
company’s so many competitors. So many products growth is so much as
compare to there anther products.
2. Differentiation Business Level Strategy
Company make such product/services is differentiating from there
competitors. Which are not offered by competitors. Company see the which
customers are ready & willing to pay premium price which can compensate
additional cost of differentiation.

Company Make Differentiation at These Point

By enhancing the¬ By¬quality i.e. offering stronger, bigger, better, vastly,
improved products. enhancing versatility, safety, utility and convenience for
customers to match their tastes and preferences.
By changing size, weight, materials.¬ Accessories of products i.e. from of

By style improvement by increasing aesthetic appeal, by

symbols,¬products. By improving the quality of¬by media, by atmosphere,
by new packaging etc. By better durability, reliability, design,
process¬inputs i.e. raw materials. of manufacturing, modern, technology,
collaboration with valued partner, unique By¬ By lower operational cost of
using the products/services. ¬location etc. By coverage, expertise
and¬offering complete range of products /services etc. Company make
product for Skin is KAYA Skin Care these¬performance of channels. is so
much differentiation to other. Company make for night crème is
PARACHUTE NIGHT REPAIR CREME.

GROWTH STRATEGY
Growth is a way of life. Almost all organizations plan to expand. This
strategy is followed when an organization aims at higher growth by
broadening its one or more of its business in terms of their respective
customer groups, customers functions, and alternative technologies singly or
jointly – in order to improve its overall performance.

There are five types of expansion (Growth) strategies ♦ Expansion through

concentration ♦ Expansion through integration ♦ Expansion through
diversification ♦ Expansion through cooperation

Growth through Acquisitions

Marico has acquired five companies in the last 18 months to expand its
product lines and business. The company acquired a number of brands such
as Aromatic soap in Bangladesh, Manjal toilet soap and Nihar hair oil in
India, and Fiancée hair care brand in Egypt. The Ready Group's Fiancée hair
care brand has captured 20 per cent of the Egyptian market. Marico is
leveraging the popularity of the Fiancée brand to expand its business in
Egypt and other parts of the Arab world.

VALUE CHAIN ANALYSIS OF MARICO

Concept
A value chain is a chain of activities for a firm operating in a specific
industry. The business unit is the appropriate level for construction of a
value chain, not the divisional level or corporate level. Products pass
through all activities of the chain in order, and at each activity the product
gains some value. The chain of activities gives the products more added
value than the sum of added values of all activities. It is important not to mix
the concept of the value chain with the costs occurring throughout the
activities.

Activities
The value chain categorizes the generic value-adding activities of an
organization. The "primary activities" include: inbound logistics, operations
(production), , marketing and sales (demand), and services (maintenance).
The "support activities" include: administrative infrastructure management,
human resource management, technology (R&D), and procurement. The
costs and value drivers are identified for each value activity.

Support activities

Administrative Infrastructure Management Human Resource

Management Technology (R&D) Profit Procurement Profit margin

Margin
Inbound logistics Operation Outbound logistics marketing & sales
services

Primary activities

Primary activities of MARICO

Inbound logistics These are the activities concerned with receiving the
materials from suppliers, storing these Here goods externally sourced
materials, and handling them within the firm. They are stored until they are
needed are received from a company's suppliers.  on the
production/assembly line. Goods are moved around the organization.
MARICO purchase their raw material from all around the world.
In order to maximize their availability of raw material MARICO
maintain good

relationship with their suppliers.

MARICO use JIT (Just in Time) approach for handling of raw
material.

Operations These are the activities related to the production of products and
services. This area can be split into more departments in certain companies.
For example, the operations in case of a hotel would include reception, room
service This is where goods are manufactured. etc.
Operations could include MARICO are known for their organizing the
parts to make final FMCG Product. reliability which comes from efficient
operations.

Outbound logistics

These are all the activities concerned with distributing the final product
and/or service to the customers. For example, in case of a hotel this activity
The goods are now would entail the ways of bringing customers to the
hotel. finished, and they need to be sent along the supply chain to
wholesalers, MARICO manage their Distributor and Super retailers or the
final consumer. Distributor in different rural and urban area.
MARICO make their product easily assessable.

Marketing and sales This functional area essentially analyses the needs and
wants of customers and is responsible for creating awareness among the
target audience of the company about the firm’s products and services.
Companies make use of marketing communications tools like advertising,
sales promotions etc. to MARICO given TV ads and magazine for
a attract customers to their products. This area focuses strongly upon
marketing communications and the marketing. promotions mix.

MARICO’s Supply Chain

Service There is often a need to provide services like pre-installation or after

sales service before or after the sale of the product or service.

This includes all areas of service such as final checking, after-sales

service
 MARICO values their Like quality, quantity, packaging, weight etc..
customers.

Support activities of MARICO

Procurement This function is responsible for purchasing the materials that
are necessary for the company’s operations. An efficient procurement
department should be able to obtain the highest quality goods at the lowest
prices.

This function is responsible for all purchasing of goods, services and The
aims to secure the lowest possible price for purchases of the materials.
highest possible quality.
MARICO will be responsible for outsourcing and e-Purchasing (using IT
and

web-based technologies to achieve procurement aims). Human Resource

Management This is a function concerned with recruiting, training,
motivating and rewarding the workforce of the company. Human resources
are increasingly becoming an important way of attaining sustainable
competitive advantage. Employees are an expensive and vital resource.
MARICO manage recruitment and selection, training and development, and
rewards and remuneration. MARICO consider their employees as HUMAN
CAPITAL. Equal support comes from our HRD team, which expends its
energies, formulating and building strategies to build a stable and high -
talent organisation. The innovations and the quest for excellence at Marico
continue unabated. Even as the success stories continue, the focus from the
consumer never shifts. Toyota motors uses following techniques to retain
their employs

♣♣♣♣♣

Recruitment Selection Training and development Compensation

Maintenance

Technology Development This is an area that is concerned with

technological innovation, training and knowledge that is crucial for most
companies today in order to survive.

Companies Technology is an important source of competitive advantage.

 need to innovate to reduce costs and to protect and sustain competitive
advantage.
MARICO implemented production technology, Internet marketing
activities,

lean manufacturing, Customer Relationship Management (CRM), and many

other technological developments. Firm Infrastructure This includes
planning and This control systems, such as finance, accounting, and
corporate strategy etc. activity includes and is driven by corporate or
strategic planning. MARICO implemented Management Information System
(MIS) and other mechanisms for planning and control in different
departments.