DABUR PESTEL ANALYSIS

Dabur Success Story

Dr. S.K Burman started Dabur in 1884

4th largest FMCG company in India

Vision: Dedicated to the health and well being of every household

Core Knowledge of Ayurveda as competitive advantage

Revenues of Rs 7,073 Crore) & Market Capitalisation of US$ 5 Billion

Focus on growing its core brands - reaching out to new geographies leveraging technology

POLITICAL & ECONOMIC FACTOR:

Goods and Service Tax, which will replace the multiple indirect taxes levied on FMCG sector with a uniform, simplified and single-pint taxation system, is likely to be implemented soon. The rate on goods is proposed to be 20% and on services 16%

As per Food Security bill, 5Kg of food grains per person per month will be provided at subsidized prices from State Governments under the targeted public distribution system. The agriculture would receive a boost and this could lead to more investment in improving agriculture productivity making it competitive

FDI in retail : Decision to allow 51% in multi brand retail and 100% in single brand retail augers well for the outlook for the FMCG sector. The move is expected to bolster employment, and supply chains, apart from providing high visibility for FMCG brands in organized retail markets, bolstering consumer spending, and encouraging more product launches

Relaxation of license rules: Industrial licenses are not required for almost all food and agro-processing industries, barring certain items such as beer, potable alcohol and wines, cane sugar, and hydrogenated animal fats and oils as well as items reserved for exclusive manufacturing in the small-scale sector.

PESTEL Analysis

ECONOMIC FACTORS :

Increasing consumerism Favorable demographics and rising income levelsTotal consumption expenditure set to increase - expected to reach nearly USD3600 billion by 2020 from USD 1328 billion in 2012Working population (aged between 15 and 64 years) estimated to increase from 780 million in 2011 to 900 million by 2030India's middle income population estimated to reach 267 million by 2016 from 160 million in 2011Rural FMCG market size to grow from USD 12 billion in 2011 to USD 100 billion by 2025 driven by increase in per capita disposable incomesDespite higher interest rates and elevated Inflation, the Indian FMCG grew at a healthy 15-20% last year driven by robust rural and urban demand

PESTEL Analysis

SOCIO-CULTURAL FACTORS :

Education levels : Education is one of the most important factor which influence the buying power of consumer, while selecting a particular goods a consumer should know all its features so it can differentiate them with another products.

Law affect social behaviour : Different laws are made by the government to safe guard the rights of consumers. For example- Consumer protection act, this law indicates that a consumer can file a case against a seller if he finds that he is cheated.

PESTEL Analysis

TECHNOLOGICAL FACTORS :

Discoveries & innovation

Advancement in technology

Measures Taken by Dabur : Dabur invested Rs. 15 crores in hardware and software for its go-downs and branches to be directly linked with its headquarters through direct emails

ENVIRONMENTAL FACTORS :

Environment regulations

Environmental protection

PESTEL Analysis

LEGAL FACTORS :

Companies law :

Employment law :

Consumer protection :

Industry-specific regulations :PESTEL Analysis

SWOT Analysis Export Opportunities in Foreign Market

Affinity towards yoga

Growing Womens earning power has made them health and beauty conscious

Unhealthy food habits due to modernization has forced people to take to ayurvedic supplements Untrained professionals

Growing competition and lower profitability

Kerala is a Ayurvedic hub, hence people visit directly and attend health camps to get cured

Lead and Ferric Content present may give reverse effect

Porters Five Force Model