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Selwin George Roll - No - 32: SWOT Analysis of Godrej Consumer Products Limited

Godrej Consumer Products Limited is an Indian consumer goods company established in 2001 with headquarters in Mumbai. It has a strong portfolio of brands like Cinthol and Good Knight. It has manufacturing units across India and a large distribution network. Some of its strengths include a diversified brand portfolio, focus on innovation, and strong distribution network. However, it lacks scale compared to major competitors like ITC and HUL. While the growing rural and personal care markets present opportunities, threats include availability of counterfeit products and competition from recognized brands. A PESTEL analysis found political support but economic and social changes positively impacting the fast moving consumer goods industry.

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247 views

Selwin George Roll - No - 32: SWOT Analysis of Godrej Consumer Products Limited

Godrej Consumer Products Limited is an Indian consumer goods company established in 2001 with headquarters in Mumbai. It has a strong portfolio of brands like Cinthol and Good Knight. It has manufacturing units across India and a large distribution network. Some of its strengths include a diversified brand portfolio, focus on innovation, and strong distribution network. However, it lacks scale compared to major competitors like ITC and HUL. While the growing rural and personal care markets present opportunities, threats include availability of counterfeit products and competition from recognized brands. A PESTEL analysis found political support but economic and social changes positively impacting the fast moving consumer goods industry.

Uploaded by

Selwin George
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Selwin George

Roll.no -32

Godrej Consumer Products Limited

Introduction:
Godrej consumer products limited which is a subsidiary of
the Godrej group is an Indian consumer goods company established in 2001
and has its headquarters in Mumbai. The company has its manufacturing units
across different regions of the country such as Madhya Pradesh, Sikkim, Assam
and Tamil Nadu. The company has a strong market share in hair colour,
households’ insecticides and liquid detergent products and also has a huge
customer base for its soap products. The company offers products such as
soaps, hair colour, liquid detergents, room fresheners, mosquito and pest
repellent products. Some of its brands are Cinthol, Good Knight, Ezee, Godrej
hair glow, etc.

SWOT analysis of Godrej Consumer Products limited-

1. Strengths in SWOT analysis:

 Strong brand portfolio – The biggest strength of the company is its


diversified brand portfolio with a wide range of products. This has
helped the company to reach various customer segments. The
company estimates having 60 million customers who use a Godrej
product every day.

 Focus on Innovation – Godrej consumer products focuses on


innovation and expansion of its product portfolio through brand
extensions and new product launches. The company has a strong
R&D facility which enables it to improve its product quality,
packaging and cost savings method.

 Distribution network: Godrej consumer products limited (GCPL)


has a strong distribution network in the country. The company has
over 142 stockists, 3175 sub-stockists and has over 6.5 lakhs
retailers in the country. One of the major reasons for the
company’s growth has been its strong investment in its
distribution channels. Constant supply of its products through
these channels has made sure that the company holds on to its
strong market share.

2. Weaknesses in SWOT analysis:

 Lack of scale: Even after building a strong brand portfolio and


having a wide distribution networks, GCPL can’t hold up against its
competitors in the FMGC segment. The company lacks scale
against companies like ITC and HUL which are its biggest
competition. Its competitors have the financial strength to
diversify in different business and invest higher in more products.

 Rural market penetration - The rural penetration of GCPL is much


less due to the lack of awareness of importance of consumer
products in the rural area. The comparatively higher prices of the
company’s goods to the prices of the products available in the
rural area is also a concern for the company.

 Less earning due to competition – Due to more competitors the


company has to offer more price discounts and lower margins
which results in price struggles.
3. Opportunities in SWOT analysis:

 Rapidly growing rural market – The rural market is rapidly growing and
the company can take advantage of its strong distribution networks to
make sure that its products are readily available in these markets.

 Increasing global presence – GCPL can tap into the market share of
developing and developed countries by joining the global market. It can
expand its strong distribution networks into the overseas market and
can supply its goods without any interruption.

 Growing personal care market – Due to the increase in purchasing


power and improvement in lifestyle of people, demand for personal care
products is expected to grow. GCPL can tap into this emerging market
which represents about 22% of the revenue for FMCG industry.

4. Threats in SWOT analysis –

 Availability of counterfeit products – Due to the presence of counterfeit


goods, the image and the revenue of the company is vastly affected. In
the Indian market, existence of counterfeit goods impacts a large of the
revenue of various FMCG companies.

 Competition from recognised companies – GCPL faces tough


competition from HUL, ITC Dabur and Patanjali. The wide popularity of
these companies acts as a huge threat to the company.

 Competitive pricing – Being in a monopolistic market it is important for


the company to offer its products at a competitive price as there are
various companies selling the same type of goods. Offering its products
at a competitive price can often affect the revenue and growth of the
company.
PESTEL analysis of fast-moving consumer goods industry

1. Political Factors – Political factors has a great influence on the industry. It is


necessary for the companies to comply with the legislations laid down by the
government. Any level of noncompliance will result in serious consequences
for that company. There are certain restrictions implemented in the import
policies. However, tax exemptions in sales and excise duty are provided for
the small-scale industries. This will allow small and medium size enterprises to
invest more and will also increase the number of new entrants. Infrastructure
and transportation facilities are improving in both rural and urban areas which
will add more power to the distributions network.

2. Economic factors – The lifting of trade and import duties provided


customers with a greater number of varied products to choose from. This
enhanced competition led to better products and low prices. The improvement
in the quality of the products helped the companies in achieving a greater
market share. This helped in pushing up productivity which led to more
exports. The increase in the per capita income has made customers spend
more on various products which has resulted in a growth of revenue for the
industry. Indian FMGC sector recorded a 16% growth in sales in the last
financial year and it is expected to improve in the coming years.

3. Social factors – The positive impact of the FMGCG industry has improved
the lifestyle of its customers. Consumers have understood that the products
offered by the companies are much more hygienic and healthier than the loose
products sold on the streets. FMCG is the fourth biggest sector in India which
contributes in creating thousands of employment opportunities.
4. Technological factors – Advancement in technology has given a massive
boost in producing quality products. These advancements have also made the
supply chain and transaction along the supply chain simple. Organizations have
reduced various costs with the help in advancements of technologies and has
also increased the rate of information transactions. Technology has also helped
to improve packaging, increase productivity and improve the shelf life of food
products. Advancements in communication technology and social media
networks has helped the organisations to communicate better with their
customers.

5. Environmental factors – Recent environmental studies have made the


industry pay more attention to protect and preserve the environment. As some
of their raw materials are grown in fields, it is important for these companies
to invest more in their safety. Efforts have been made to set up greenhouses.
There has been establishment of green buildings which use more herbal waste
and consume less clean and fresh water. The pressure on energy is reduced by
using alternative sources of energy like herbal waste. Government has also
levied some anti-dumping laws which prohibits manufacturing facilities to
contaminate any clean source of water flow.

6. Legal factors – The government has replaced various indirect tax


implications with a more direct approach like GST. This has helped in lowering
prices which has taken away less burden from the consumers. Law has been
implemented which prevents these companies to increase their price by
making a product scarce. There are laws for the advertising aspect too. One of
the law states that one company cannot mock a product of another company
by taking its name or showing its picture in their advertisements. The setup of
consumer protection rights has impacted the industry in a large scale. It is
necessary for the companies to act in accordance to the laws of consumer
rights.

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