INDUSTRY SWOTANALYSISStrengths:•Well-established distribution network extending to rural areas.•Strong brands in the FMCG sector.•Low cost operationsWeaknesses:•Low export levels.•Small scale sector reservations limit ability to invest intechnology and achieve economies of scale.•Several "me-too’’ products.Opportunities:•Large domestic market.•Export potential•Increasing income levels will result in faster revenue growth.Threats:•Imports•Tax and regulatory structure•Slowdown in rural demand

BCG MATRIXThe BCG matrix method can help understand a frequently madestrategy mistake: having a one-size -fits-all-approach to strategy,such as a generic growth target.In such a scenario: A. Cash cows business units will beat their profit target easily; their management has an easy job and is often praised anyhow. Even,worse they are often allowed to reinvest substantial cash amountsin their businesses, which are mature, and not growing anymore.B. Dogs business units fight an impossible battle and, even worse,investments are made now and then in hopeless attempts to ‘turnthe business around’.C. As a result (all)question marks and stars business units getmediocre size investment funds. In this way they are unable to ever become cash cows. These inadequate invested sums of money area waste of money. Either these SBUS should receive enoughinvestment funds to achieve a real market dominance and becomea cash cow(or star), or otherwise companies are advised todisinvest and try to get whatever possible cash out of the questionmarks that were not selected.

Limitations of BCG matrix:Some limitations of Boston consulting group matrix include:•High market share is not only success factor.•Market growth is not the only indicator for attractiveness of amarket.•Sometimes dogs can even more cash as cash cows.21 BCG MATRIX.. HLLRexona , Pears,Lifebuoy, breezeJohnson & Johnson-Savlon,Dettol, breeze,Maisur Sandal soap,Godrej-shikakai ,?HLL: lifebuoy +,Santur Nirma – nirma bathsoap nirma lime soap- camay,Godrej- Fairglow HLL-Lux, Hamam,Dove,LirilNIRMA-beauty soapJohnson & Johnsonbaby soapGodrej-Cinthol, Godrejno. Colgate pamoliveGodrej-Ganga, GodrejNo.1breeze22

Cash cow - A business unit has a large market share in a mature, slowgrowing industry. Cash cows require little investment andgenerate cash that can be used to invest in other business units.Star - A business unit that has a large market share in a fastgrowing Industry. Stars may generate cash, but becausethe market is growing rapidly they require investment tomaintain their lead. If successful, star will become a cashcow when its industry matures.Question mark (problem child) -A business unit that has a small market share in a highgrowth market. These business units require resourcesto grow market share, but weather they will succeed andbecome stars is unknown.

Dog - A business unit that has a small market share in a matureindustry. A dog may not require substantial cash, but itties up capital that could better be deployed elsewhere.Unless a dog has some other strategic purpose, it shouldbe liquidated if there is little prospect for it to gain marketshare.

Five forces analysis of bathsoap industrySUPPLY Abundant supply in metrosCompetition is beefing up their distribution network to penetrate therural areas.DEMAND At an average GDP growth of 5.5% until February 2007, and thepresent consumer demand is set to boom by almost 60% over thisperiod.Most fmcg companies are awaiting to tap this latent.BARRIERS TO ENTRYHuge investment in promoting brands, setting of distribution networkand intense competition.BARGAINING POWER OF SUPPLIERSMany established players have a slight edge in bargaining power giving the competition among suppliers.Some of the companies have backward integration, which reducesthe suppliers clout.BARGAINING POWER OF CUSTOMERSDue to increase in branded products, there is less chance that theconsumer can influence, but intense competition within fmcgcompanies result in value for money deals for consumers.(eggetting one soap free with one unit of soap) COMPETITIONIn bath soap industry there are low profit margins about 5 – 10% butthey are selling in huge volumes.To beat the competition companies mainly use various strategieslike discounts and freebies.Unbranded players are size of Rs.1-3 billion and they are growingat the rate of 10%.Local players have no large distribution network so they are givingfight to the branded products by giving huge margins to retailerswhich is an important part of supply chain.

Competitive Analysis of Toilet Soap Industry

Social factors:The social factor is very important when it comes to Premium soaps segment of thesoap market. With the rising education and disposable income levels, the need for hygiene and personal / skin care becomes important. Premium soaps are thustargeted at the audience to change their habits by raising their aspiration levels.Lack of good hygiene factor like availability of clear water for bathing purpose alsodiscourages extensive use of premium soaps by vast population. Fragmentedapproach of govt. and NGO’s towards inefficient PHC-primary health center alsoaggravates the problem. Investment in basic sanitation will make biggestimprovement to health and also to the soap market.The growing reach of advertising medias like satellite and cable TV too is expectedto give a boost to the market penetration initiatives of the industry players.

Technological Factors:The industry though capital intensive is not very technology intensive. Premiumsoap manufacturing though compared with other soaps manufacturing relies to anextent on technology (especially in the finishing stage). The more important islogistics management where marketing and distribution play a pivotal role. Heretechnology like (SCM) Supply Chain Management and (E-CRM) ElectronicCustomer Relationship Management will play a pivotal role. Companies like HLLare working very hard towards such a system to rope up the entire small stores andretailers (Kirana Stores).The results of a survey done by National Council of Applied Research (NCAER)suggest that Indian FMCG space is all set to enter a new growth phase, sample this:the study says that the lower income group is expected to shrink from over 60 percent (1996) to 20 per cent by 2007 and the higher income group is expected to18

Competitive Analysis of Toilet Soap Industryrise by more than 100 per cent. It looks; the industry is all set for a fast-paced raceahead.SWOT ANALYSISStrengthsSoap penetration: soap has a very high penetration of 95% in the urban region whilethe rural region contributes to 85% penetration, which shows a potential for growthin the rural sector.Soaps is a Delicenced Industry, which symbolizes that any individual with financeand marketing skills can enter the industry.WeaknessThe duty structure: excise duty is at the rate of 16% on all toilet soaps and the salestax structure varies from state to state with a minimum of 8 % in some statesranging upto 20 % in most of the southern states like Andra Pradesh, Tamil Nadu,and OrissaIndia solely depends on

the Imports for vegetable oil mainly from Malaysia &Indonesia and import duty is as high as 35%.The fairly high contribution from rural market makes this category sensitive to thefortunes of the agriculture economyThe large-scale organized sector where the Technology and Capital Invested arehigh. The other popular and carbolic soaps are manufactured by smallmanufacturing units predominantly existing in the southern sector.Heavy launch costs19

Competitive Analysis of Toilet Soap IndustryOpportunityIndian Exports for Soaps are quite insignificant. The reason being other South Asiancountries like Malaysia, Indonesia and China have Palm Oil available in abundance.Hence exporting Soaps becomes an expensive proposition. India can concentrate onexports of specialty soaps like ayurvedic, herbal and special categories like fairnesssoaps.Internet is fast emerging as a strong distribution channel and the new players arefinding it easier to launch assaults through this medium very effectively.In the world of cut throat competition ‘Quality’ at an affordable price is the newmantra. Companies are trying every measure to improve the quality of the product by maintaining or at times even decreasing the price to make the product affordableand competitive.Presence of a large unorganized market: branded products can wash theunorganized market by providing value for money products at competitive marketThreatsIndustry Growth – the entire soap Industry is growing at a minimal rate of 3 % andthe entire FMCG industry is passing through turmoil, where the soap segmentregistered actually a negative growth leading to saturation.The only players we see are the low (cheap) quality soaps from countries likeIndonesia, Malaysia and China, which has a low freight cost structure and also asubstantially low cost of manufacturing