Competing with Patanjali Ayurved
Document Type:Case Study
Subject Area:Business
The success has caused serious trouble even to companies that have dominated the industry for years. The company’s rapid success is fueled by the ever-increasing consumer demand for the company’s products, the constant launch of new product categories, and a broad distribution and retail network (Ahmed, 2018). These growth drivers are attributed to various company specific, industry-specific, and country-specific reasons. a. Company (Patanjali) Specific reasons. Furthermore, while other companies in the industry focused on outsourcing, Patanjali gained benefits from its “backward integration model” which allowed direct interactions with farmers who supplied a variety of herbal ingredients as per their requirements. This factor shocked both domestic and multinational competitors while it impressed investors. Another company specific aspect that propelled Patanjali to success is the company’s strong distribution network. The franchise model adopted by Patanjali exponentially grew from about 150 outlets in 2012 to approximately 4,000 stores in 2018 (Kushwaha, 2018).
The company’s success in the franchise model caused to the company to avail its broad products range to the open market. c. Country (India) Specific Reasons One country-specific reason that contributed to Patanjali’s massive success is India’s population. The country has a population of about 1. billion, which presents the second largest market in the world on consumer purchase power. This presented ready and reliable market to Patanjali’s category of daily necessity products such as toiletries, beverages, and packaged foods (Nayak, 2017). This strategy is likely to gain HUL significant market share because women represent the majority of the company’s employees and customers. Another strategy of defending HUL’s market share is launching numerous new product categories under the company’s Ayurveda brand. Colgate-Palmolive India Limited Just like Pantajali, Colgate has largely been successful in the Indian market.
In 2016, Colgate was recognized as India’s most trusted brand for the sixth time in a row (Ramraika & Trivedi, 2016). This indicates that Colgate has gained and maintained trust among Indian consumers. Dabur should also package its product portfolio to put it in sync with the needs and expectations of the 21st-century customers. Another strategic response that Dabur will adopt is running various social and charitable programs to improve the economic, education, and health development of Indian communities, especially for women and children. Sri Sri Ayurveda Patanjali and Sri Sri Ayurveda have used a similar business model to penetrate and succeed in the Indian market. While Patanjali used Baba Ramdev as its celebrity marketer, Sri Sri used Sri Sri Ravi Shankar. By 2017, Ravi Shankar was estimated to have over 350 million followers around India and more in 155 countries around the globe.
Product dependency A major weakness that Pantajali exhibits is product dependency. Although Patanjali has numerous products in its product portfolio, a large part of the company’s revenues is dependent on less than ten of its main products such as shampoo and toothpaste (Khan & Srivastava, 2018). Product dependency is a major weakness for Pantajali because a failure in a few of the dependent products would mean a failure in the entire company. b. Penetration pricing Another weakness in Pantajali’s business model is the predominant use of penetration pricing (Bryant, 2015). Although this strategy is productive for the company at the moment, it is risky and not sustainable in the long-run. Overcoming the Weaknesses For Patanjali to sustain its growth, it has to push all its products rather than depending on a few products.
Overcoming the weakness of product dependency requires an analysis of the company’s product portfolio to determine products with the potential for growth but have been neglected. For the unprofitable or underperforming products, the company could consider restructuring or rebranding them to boost sales. Although penetration pricing brings new customers to Pantajali’s stores, increases the company’s market share, and builds customer loyalty, it is a weakness for the company since maintaining the prices too low might impede the company’s growth. In the future, Pantajali should adopt the strategy of creating sub-brands for the most popular product lines to minimize any future risks associated with the umbrella brand “Patanjali. ” Creating sub-brands with strong brand architecture will also be strategic for Patanjali in reducing product dependency (Dubey, 2017). Furthermore, the strategy will also be helpful in creating greater product depth and appealing a wider variety of customer segments.
Another future strategy for Patanjali in terms of marketing is minimizing the reliance on brick and motor stores. The company should consider partnering with e-tail majors such as Amazon and Flipkart to expand its market horizon. Bryant, E. F. The yoga sutras of Patanjali: A new edition, translation, and commentary. North Point Press. Dubey, J. Patanjali: Business Proposition, Strategic and Marketing Plan. Multidisciplinary Higher Education, Research, Dynamics & Concepts: Opportunities & Challenges For Sustainable Development (ISBN 978-93-87662-12-4), 1(1), 272-283. Kushwaha, S. Strategies that unpaid brand ambassador baba ramdev employed to create brand patanjali. Indian journal of applied research 8. Patanjali: Reinventing Competitive Strategies in Indian FMCG Market.
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