Patanjali 281c22

PATANJALI AYURVED LIMITED • FORMED IN 2006 BY BABA RAMDEV AND ACHARYA BALKRISHNA. • THE OBJECTIVE OF ESTABLISHING SCIENCE OF AYURVEDA IN ACCORDANCE AND COORDINATION WITH THE LATEST TECHNOLOGY AND ANCIENT WISDOM. • FASTEST GROWING FMCG COMPANY IN INDIA. • HAS GROWN MORE THAN TEN TIMES IN REVENUE IN LAST FIVE YEARS

• PRODUCTS RANGING FROM SHAMPOO AND BISCUITS TO GHEE AND NOODLES, AND NOW APPAREL AND FOOTWEAR.

RISE OF PATANJALI PATANJALI’S REASONS FOR SUCCESS AND KEY TAKEAWAYS • Low pricing and cost dynamics • Focus on product quality • Extensive sales and distribution network • Hiring the right talent • Baba as brand ambassador • Product experimentation and innovation • Cultural appeal

CORPORATE LEVEL STRATEGY CORPORATE STRATEGY IS HIERARCHICALLY THE HIGHEST STRATEGIC PLAN OF THE ORGANIZATION, WHICH DEFINES THE GLOBAL GOALS AND WAYS OF THEIR ACHIEVING WITHIN STRATEGIC MANAGEMENT. CORPORATE LEVEL STRATEGY IS CONCERNED WITH THE STRATEGIC DECISIONS A BUSINESS MAKES THAT AFFECT THE ENTIRE ORGANIZATION. FINANCIAL PERFORMANCE, MERGERS AND ACQUISITIONS AND THE ALLOCATION OF RESOURCES ARE ALL CONSIDERED PART OF CORPORATE LEVEL STRATEGY.

VISION Keeping Nationalism, Ayurved and Yog as their pillars, Patanjali is committed to create a healthier society and country. To raise the pride and glory of the world, they are geared up to serve people by bringing the blessings of nature into their lives. With sheer dedication, scientific approach, astute planning and realism, Patanjali is poised to write a new success story for the world. MISSION Making India an ideal place for the growth and development of Ayurveda and a prototype for the rest of the world.

GROWTH STRATEGY GROWTH STRATEGY IS DESIGNED TO EXPAND AN ORGANIZATION’S PERFORMANCE USUALLY AS MEASURED BY SALES, PROFITS, PRODUCT MIX, MARKET COVERAGE, MARKET SHARE, ETC.

REACH:

• Patanjali’s household penetration had increased from 27.2% in 2016 to 45.4% in 2017.

• While Maggi remained the fastest growing brand with a global reach, Patanjali’s jaw-dropping increase of 400 million customer reach points in Asia made it officially the biggest grower in 2017. • In 2017 it focused its marketing activity in southern and rural India, with south India seeing the highest penetration growth (183%) and rural areas having far higher growth than urban.

Diversification: •

Patanjali’s product offering is as diverse as it can get. It spans across various product lines with a very low “product mix consistency”.

•

Patanjali Ayurved confirmed plans to launch its apparel business — Paridhan in December 2018.

•

Patanjali Ayurved also announced its foray into the dairy segment by launching milk and milk-based products, including curd and cheese, targeting sales worth Rs 1,000 crore from the segment.

•

It has also ventured into the frozen vegetable segment and introduced products such as sweet corn, pea and potato fingers.

•

Patanjali has also started dabbling in the digital space with the launch of SIM cards and an instant swadeshi messaging app Kimbho to take on WhatsApp.

Competitive Advantage: Biggest Competitors:-

Sales Growth: Year wise growth of Patanjali Ayurveda Launches Patanjali range of FMCG goods March, 2012 Turnover in: 2011-12 Rs 446 crore Turnover in 2012-13 Rs 850 crore Turnover in 2013-14 Rs 1200 crore Turnover in 2014-15 Rs 2006 crore Turnover in 2015-16 Rs 5000 crore Turnover in 2016-17 Rs 10,510 crore Turnover in 2017-18 Rs 10,500 crore

E-commerce Aiming to expand its footprint in the country's FMCG sector, Patanjali launched its e-commerce platform under the tagline "Haridwar to har dwar" (Haridwar to every door step online). The company has also announced its partnership with leading eretailers and aggregators to authorise online sales of its products which include Paytm Mall, BigBasket, Flipkart, Amazon India, Grofers, Netmeds and Shopclues, among others.

The company estimated that shares of online sales will contribute 15 per cent in total turnover in future.

VALUE-CREATING STRATEGY A value-creating strategy is one in which the business seeks to edge out its competitors by gaining more market share. Positioning: Patanjali has a two pronged positioning strategy: 1. The brand slogan of Patanjali is “Prakriti ka Aashirwaad” which means blessings of nature. Patanjali is positioned as “natural products available at affordable prices”. 2. The 2nd positioning plank is that of “swadeshi make” (made in India). Baba Ramdev's flagship company, Patanjali, beat around 1,000 of India's top FMCG companies to emerge as the most trusted brand in the sector, as per TRA's brand trust report 2018.

Strategic Marketing: Choosing the Value Segmentation & Targeting Patanjali has segmented its market based on 1. Demographic – Income, age etc. 2. Psychographic - Health Consciousness, Patriotism Patanjali's target segment comprises of health conscious people who prefer “value for money” natural products. Patanjali has products targeted at children (health drinks) and elderly people (some ayurvedic medicines). Almost all products of Patanjali are affordable in nature (at a price 15% - 30% lower than the competition), hence the income segmentation strategy has worked. These 2 segments have found value in Patanjali's natural and ayurvedic products. Patanjali's market targeting strategy is that of “Selective Specialization” as they cater to a lot of segments in their market but not the entire market.

BUSINESS LEVEL STRATEGY BUSINESS LEVEL STRATEGIES DETAIL ACTIONS TAKEN TO PROVIDE VALUE TO CUSTOMERS AND GAIN A COMPETITIVE ADVANTAGE BY EXPLOITING CORE COMPETENCIES IN SPECIFIC, INDIVIDUAL PRODUCT OR SERVICE MARKET. BUSINESS LEVEL STRATEGY IS CONCERNED WITH A FIRM’S POSITION IN AN INDUSTRY AND RELATIVE TO COMPETITORS. CUSTOMERS ARE THE FOUNDATION OR ESSENCE OF A ORGANIZATION’S BUSINESS LEVEL.

LOYAL CONSUMER BASE AND COMPETITIVE PRICE • Baba Ramdev's fanatic consumer base of about 70 million has proved to be a great head start for him. This large fan base comes from an Ayurveda-freak nation and years of conducting yoga sessions. • Further, Patanjali's products are priced lower than their key competitors for price sensitive indian consumers, who now see more “value” in Patanjali's products.

ANTI-FOREIGN CAMPAIGNS Time and again, baba Ramdev raised voices to boycott “foreign” products, ranging from shampoos to colas, by showing their ill-effects. This further created a loyal consumer base that promoted word-ofmouth advertising for Patanjali and cleared ways for different product categories.

NO FINANCIAL BURDEN AND MINIMAL ADVERTISING BUDGET • Baba Ramdev's 40 crores corpus, that he garnered from his yoga shiviris, satellite television shows and donations, was utilized to kick start the empire. Further, Patanjali relies heavily on word-of-mouth advertising, with a few commercials (such as for cow’s ghee) to strengthen its brand identity and promise.

• Patanjali remains perhaps the only company in the FMCG space that didn’t rely on advertising for its scalability during its nascent years. Word of mouth publicity and powerful endorsements by baba Ramdev via his yoga camps helped build scale. Moreover, an exclusive store network proved a winning strategy.

DISTRIBUTION STRATEGY • Being present in different products segments and having 4 different sub-brands has helped the company in having a high share of wallet of the customers. Distribution is one of the critical instruments in the success of the FMCG players in a country like India and Patanjali through its own retail outlets and partnered channel of distribution has made the products available to its customers in most of the locations in India.

• There are nearly 10,000 consumer touch points as “chikitsalayas” (dispensaries) and “aarogya kendras” (health centres). These are operated by third party vendors as exclusive Patanjali stores.

• Once a sizeable consumer base is built through these dedicated stores, these consumers would expect Patanjali’s products to be available at general stores, grocers and chemists in the vicinity of the dedicated store. These retailers are then forced to stock up on Patanjali’s products for fear of losing out on a customer’s goodwill. This builds a platform for the next stage of growth. Thus by the usage of these competitive advantages and different distribution strategies, Patanjali’s growth has stupefied other FMCG players. • With more than 4600 retail outlets across India and distributing its products through e-commerce sites, supermarkets chains like future group’s big bazaar, reliance retail outlets and many others, Patanjali is emerging as a fastest growing FMCG company in India.

USING NATIONALISM AS A BUSINESS STRATEGY • Swadeshi v/s videshi – baba Ramdev has continuously pitched Patanjali as a “swadeshi” alternative to all the MNC products which help source Indian money abroad to “videshi” FMCG companies like HUL, P&G and nestle. • Targeting china in particular – portraying china as an arch enemy which is looting Indian consumers. • Patriotic duty – they emphasize on the belief that the money of this nation should not go overseas, which is a very naïve proposition in this current day ad age of globalization. • Charity- profits are used solely for charity by claiming “collective prosperity and charity are our goals”.

FUNCTIONAL STRATEGY The third level of strategic planning is functional strategies, which are derived from the tactical strategies.

Functional strategies specify outcomes to be achieved from the daily operations of specific departments or functions. Functional strategies reflect that strategic and tactical objectives typically require the involvement of multiple functional areas, such as departments, divisions, and branches. Thus, the tactical plan is divided into the tasks and objectives of each functional area.

• Production Strategy ("make or buy") - defines what the company produces itself, and that purchases from suppliers or partners, that is, how far worked out the production chain. • Financial Strategy- to select the main source of funding: the development of their own funds (depreciation, profit, the issue of shares, etc.) Or through debt financing (bank loans, bonds, commodity suppliers' credits, etc.). • Organizational Strategy- decision on the organization of the staff (choose the type of organizational structure, compensation system, etc.). Others, such as: research and development (r & d) strategy, investment strategy, etc. In addition, each of the functional strategies can be divided into components.

• For example, organizational strategy can be divided into three components:

• Strategy to work with the staff - a way of training (mainly istrative staff), training of staff (in a business or educational institutions), career planning, etc.; Strategy of remuneration (wages, rewards and penalties) - in particular, the approach to the compensation of senior managers (salary, bonuses, profit sharing, etc.).

• Marketing strategy :the functional strategy for the marketing department in of the business' goal to increase market share is likely to include identification of new market segments, brand identification programs.

HR STRATEGY • Patanjali may be a startup for all practical purposes but it does not hire technology savvy yuppies or fancy MBA's. • It hires professionals who carry the highest distinction in biology and other organic science streams. All the professionals hired must go through a process of oral and written assessment for the authorities to decide whether they are in sync with the thinking behind Patanjali Ayurveda which proposes to mass market natural organic products.

GLASSDOOR REVIEWS

FINANCE STRATEGY • As of year 2017

• PUSC: 41.32 crores - only 8 shareholders • Secured loans - 3,716.97 crores • All these loans are secured against the machines, factory premises • Heavy reliance on borrowed funds

• Yoga guru baba Ramdev's Patanjali Ayurveda has hired two investment banks to raise structured credit worth rs1,000 crore, two people aware of the development said. One of the two investment banks is a Hyderabad-based boutique firm specializing in the consumer packaged goods segment, the people mentioned above said on condition of anonymity, adding that the banks have been asked to approach both foreign and domestic funds. In August, Patanjali had announced its intention to borrow rs1,000 crore to finance its expansion plans.

“The discussions assume significance since this is for the first time since its founding in 2007 that Patanjali is exploring an equity-linked fund-raise option,” the first of the two persons cited above said. Along with the typical interest payment associated with debt, structured credit may include an equity stake in the form of attached warrants or a conversion feature similar to that of a convertible bond. The group has so far rejected offers, including from private equity funds, to sell equity stakes. In a recent interview to moneycontrol.Com, acharya Balakrishna, Patanjali's group chief executive officer, also ruled out an initial public offering in the near future.

• “The investment banks have also been asked to explore possible investment structures that suit long-term capital needs of the group,” the first person cited above said. “They (i-banks) have approached several foreign and domestic structured credit funds with an initial proposal,” said the second person. “Discussions are at an exploratory stage presently, but the company wants to tie up the funding in the next few months,” this person said. “Among those who have been approached is a large global fund with private equity and structured credit operations in India.”

• The second person stated that Patanjali has a comfortable liquidity position, adding, “compared to conventional bank credit, a structured credit investment which typically is debt with an equity upside will give Patanjali more flexibility over the repayment structure and tenor, as well as over the use of the funds.” In recent statements, Patanjali has said that it wants to raise long-term project finance to fund its food parks.

PRODUCTION STRATEGY • Patanjali Ayurved limited produces quality herbomineral preparations. To monitor quality, the Divya Yog mandir trust and Patanjali Yog Peeth grow many endangered herbs on its farmland. The principles of good manufacturing practices (GMP) are rigorously followed in the plant and company prides itself on being environment friendly.

A high stress on quality, several quality circles and special quality circles and special project teams working on total quality management (TQM) projects make quality a way of life in Patanjali Ayurved limited. This enables Patanjali Ayurved limited to produce herbomineral preparations with uniform levels of batch-to-batch consistency. This ensures that the customer gets the same high quality product regardless of where it is purchased. The special equipment required for manufacturing of sterile products (Bhasma, Ghanstva, eyedrop, capsule, etc.) Includes component washing machines, steam sterilizers, membrane filter machines, manufacturing vessels, blenders, liquid filling machines, powder filling machines, sealing and labelling machines.

Unit sterilizers are double ended with suitable interlocking arrangements between the doors. The effectiveness of the sterilization process is established initially by biological inactivation studies using microbial spore indicators and then at least once a year by carrying out thermal mapping of the chamber. Filling machines are challenged initially and then at periodic intervals by stimulation trials including sterile media fill. On procurement, engineers with the of production and quality assurance personnel have done installation qualification of each of the equipment. Equipment for critical processes like aseptic filling and sterilizers are suitably validated according to a written programme before putting them to use. Standard operating procedures are available for each equipment for its calibration and operation and cleaning.

• The company, which currently has 50 manufacturing units, wants to scale up production at its existing facilities in Maharashtra, Assam, Andhra Pradesh, Madhya Pradesh, Uttar Pradesh and Uttarakhand, a company spokesperson told Bloombergquint. Source newspaper : MINT • Patanjali food and herbal park at Haridwar is the main production facility operated by Patanjali Ayurveda.[21] the company has a production capacity of ₹350 billion (US$4.9 billion) and is in the process of expanding to a capacity of ₹600 billion (US$8.4 billion) through its new production units at several places, including Noida, Nagpur, and Indore. The company plans to establish further units in India and in Nepal. In 2016, the Patanjali food and herbal park was given a full-time security cover of 35 armed central industrial security force (CISF) commandos. The park will be the eighth private institute in India to be guarded by CISF paramilitary forces.[26] baba Ramdev is himself a "Z" category protected of central paramilitary force

MARKETING STRATEGY • Baba Ramdev is constantly pushing Indian people to start using Indian brands and save the economical growth of the company. Patanjali is planning to take over all reputed brands dealing in beverages and foods. Some of the sectors where Patanjali products are already doing great: foods – including jams, biscuits, noodles, oats, pulses and many other lines of food products. Beverages healthcare & medicines personal care products cleaning agents

PRODUCTS THAT ARE ALREADY MAKING NEWS AND HAVE FORCED COMPETITORS TO BRING THEIR PRICES DOWN IN ORDER TO SAVE THEIR PRESENCE IN THE MARKET: Products where Patanjali is present and beating competition are: • Dabur honey: Patanjali Ayurved is providing people with option to buy quality honey at around 30% lesser price than Dabur. • Colgate: Patanjali Ayurved is preaching how Colgate cheated people in early days. And how Ayurved is the best way to treat your gums and your teeth. • Patanjali noodles: Patanjali noodles rose to fame while Maggi was away from the market and has done quite damage to Maggi, which once was the king of noodle’s market.

PRICING IN THE MARKETING MIX OF PATANJALI • Two factors that have made Patanjali Ayurved the fastest growing FMCG company in India are: • A) use of natural ingredients and Ayurved and • B) pricing. Pricing plays an extremely important role Patanjali is educating people about the benefits of using their products and are also using price comparison as an effective marketing strategy. • The pricing strategy is clearly penetrative pricing because Patanjali knows that it cannot conquer the market with higher prices. Plus, if the ingredients are natural and domestic, the cost of the product is lesser too. • There is a drop of 25-30 percent of price in almost every product when compared to international brands which is helping Patanjali reach each and every household in India.

PLACE IN THE MARKETING MIX OF PATANJALI AYURVED • Extensive distribution model :Patanjali Ayurved is India's fastest growing FMCG company but it is not stopping it from spreading its wing to neighboring countries like Nepal. Patanjali has a manufacturing unit in Nepal. Patanjali also imports herbs from Himalayas in Nepal; the well-established trade relation is helping Patanjali expand its wings in Nepal with great ease. With the growing outreach in India and Nepal, baba Ramdev surely will be aiming to overtake market in lot of other countries. With impressive revenue of 5000 crores, Patanjali is surely going to have a lot of fund for expansion and growth.

PROMOTION IN THE MARKETING MIX OF PATANJALI AYURVED: • Patanjali Ayurved goes with the slogan “Prakriti ka Ashirwad”. Well, Patanjali Ayurved has acquired the requisite fame and popularity among people because of the globally recognized yoga guru, Baba Ramdev. This brand ambassador of Patanjali is single handedly responsible for the success of the brand. His contribution to people’s life through yoga is incredible hence people felt aligned towards him when he launched his very own Indian FMCG company.

MARKETING MIX OF PATANJALI • While a lot of people shifted to Patanjali products because of baba Ramdev, a pool of Indians started following him when they realized how good and cheap Patanjali products actually are. Patanjali ad campaigns have always focused on suring information to people that “revenue of Patanjali is for charity and not for brand owners”. Secondly, it is better that the revenue generated from day to day products remains within India rather then the profits going out to foreign companies. Till date, Indians did not have many alternatives to foreign products but now they do have localized products. Baba Ramdev took the opportunity in his hands and has started influencing Indians by sharing information about price gap and how useful herbal Patanjali products actually are. Baba Ramdev has ceased the opportunity with both hands and has made huge difference to the branding of Patanjali Ayurveda. Now, Patanjali is also selling the products online through e-commerce, increasing their penetration even further.

QUICK RUN THROUGH ONLY TIME WILL TELL HOW PEOPLE FROM AROUND THE WORLD ARE GOING TO RECEIVE PATANJALI PRODUCTS AS AN ALTERNATIVE OF PRODUCTS FROM HINDUSTAN UNILIVER AND P&G.

NAMASTEY !

GROUP NUMBER : 14 GROUP TOPIC: PATANJALI GROUP GROUP :

A-2 VISHAL B-2 NAMAN A-3 RIDDHI

B-11 KESHAV B-39 PARTH B-46 DEEP B-52 AISHWARYA