Case Study Description of Combating the Yoga Guru: Dabur's Dilemma
The case intends to introduce the reader to a disruption in the Indian FMCG industry. A single new entrant, Patanjali entered the FMCG industry in 2006, combating incumbents and attacking them on all fronts. Within a short span of time, it was able to produce results and exceed industry expectations. The case starts with the evolution story of Dabur, the world's largest Ayurvedic and natural healthcare company. It indicates the major milestones of the company and how it has been able to combat all sorts of threats but retain the top spot in many of the segments it operates in, over the years. The case then discusses a potential threat to Dabur from the new entrant, Patanjali. Building on its Ayurveda brand, Patanjali launched a foray of FMCG products and, drastically reduced prices. Using the power of a Yoga guru that made the product so widely accepted among the Indian masses, Patanjali is threatening every FMCG giant in the country. The case then goes on to depict how Patanjali seems to have gone on a direct frontal attack against all existing big players. The case is written from the perspective of Dabur to understand the nature of competition it faces from Patanjali.
Swot Analysis of "Combating the Yoga Guru: Dabur's Dilemma" written by Manaswini Bhalla, Koustav Dey, Pulkit Aggarwal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Patanjali Fmcg facing as an external strategic factors. Some of the topics covered in Combating the Yoga Guru: Dabur's Dilemma case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Combating the Yoga Guru: Dabur's Dilemma casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, increasing commodity prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, technology disruption,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Combating the Yoga Guru: Dabur's Dilemma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Combating the Yoga Guru: Dabur's Dilemma case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Patanjali Fmcg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Patanjali Fmcg operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Combating the Yoga Guru: Dabur's Dilemma can be done for the following purposes –
1. Strategic planning using facts provided in Combating the Yoga Guru: Dabur's Dilemma case study
2. Improving business portfolio management of Patanjali Fmcg
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Patanjali Fmcg
Strengths Combating the Yoga Guru: Dabur's Dilemma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Patanjali Fmcg in Combating the Yoga Guru: Dabur's Dilemma Harvard Business Review case study are -
Effective Research and Development (R&D)
– Patanjali Fmcg has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Combating the Yoga Guru: Dabur's Dilemma - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Global Business industry
– Combating the Yoga Guru: Dabur's Dilemma firm has clearly differentiated products in the market place. This has enabled Patanjali Fmcg to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Patanjali Fmcg to invest into research and development (R&D) and innovation.
Analytics focus
– Patanjali Fmcg is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Manaswini Bhalla, Koustav Dey, Pulkit Aggarwal can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Patanjali Fmcg is one of the leading recruiters in the industry. Managers in the Combating the Yoga Guru: Dabur's Dilemma are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Patanjali Fmcg is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Patanjali Fmcg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Patanjali Fmcg is present in almost all the verticals within the industry. This has provided firm in Combating the Yoga Guru: Dabur's Dilemma case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Patanjali Fmcg has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Strong track record of project management
– Patanjali Fmcg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Patanjali Fmcg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Patanjali Fmcg has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Patanjali Fmcg are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Patanjali Fmcg in the sector have low bargaining power. Combating the Yoga Guru: Dabur's Dilemma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Patanjali Fmcg to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Patanjali Fmcg in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Combating the Yoga Guru: Dabur's Dilemma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Combating the Yoga Guru: Dabur's Dilemma are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Combating the Yoga Guru: Dabur's Dilemma, it seems that the employees of Patanjali Fmcg don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Skills based hiring
– The stress on hiring functional specialists at Patanjali Fmcg has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Combating the Yoga Guru: Dabur's Dilemma HBR case study mentions - Patanjali Fmcg takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Patanjali Fmcg, firm in the HBR case study Combating the Yoga Guru: Dabur's Dilemma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Patanjali Fmcg is dominated by functional specialists. It is not different from other players in the Global Business segment. Patanjali Fmcg needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Patanjali Fmcg to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Combating the Yoga Guru: Dabur's Dilemma that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Combating the Yoga Guru: Dabur's Dilemma can leverage the sales team experience to cultivate customer relationships as Patanjali Fmcg is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Combating the Yoga Guru: Dabur's Dilemma, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Capital Spending Reduction
– Even during the low interest decade, Patanjali Fmcg has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Patanjali Fmcg has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Patanjali Fmcg even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Combating the Yoga Guru: Dabur's Dilemma HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Patanjali Fmcg has relatively successful track record of launching new products.
High cash cycle compare to competitors
Patanjali Fmcg has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Combating the Yoga Guru: Dabur's Dilemma | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Combating the Yoga Guru: Dabur's Dilemma are -
Learning at scale
– Online learning technologies has now opened space for Patanjali Fmcg to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Patanjali Fmcg can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Patanjali Fmcg to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Patanjali Fmcg to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Patanjali Fmcg has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Patanjali Fmcg to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Patanjali Fmcg in the consumer business. Now Patanjali Fmcg can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Patanjali Fmcg can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
Better consumer reach
– The expansion of the 5G network will help Patanjali Fmcg to increase its market reach. Patanjali Fmcg will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Patanjali Fmcg can use these opportunities to build new business models that can help the communities that Patanjali Fmcg operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Patanjali Fmcg has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Combating the Yoga Guru: Dabur's Dilemma - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Patanjali Fmcg to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Patanjali Fmcg is facing challenges because of the dominance of functional experts in the organization. Combating the Yoga Guru: Dabur's Dilemma case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Patanjali Fmcg can develop new processes and procedures in Global Business industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Patanjali Fmcg in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Threats Combating the Yoga Guru: Dabur's Dilemma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Combating the Yoga Guru: Dabur's Dilemma are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Patanjali Fmcg in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Patanjali Fmcg demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Patanjali Fmcg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Patanjali Fmcg.
Technology acceleration in Forth Industrial Revolution
– Patanjali Fmcg has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Patanjali Fmcg needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Patanjali Fmcg is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Patanjali Fmcg needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Patanjali Fmcg can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Patanjali Fmcg in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Increasing wage structure of Patanjali Fmcg
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Patanjali Fmcg.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Patanjali Fmcg will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Regulatory challenges
– Patanjali Fmcg needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
Weighted SWOT Analysis of Combating the Yoga Guru: Dabur's Dilemma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Combating the Yoga Guru: Dabur's Dilemma needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Combating the Yoga Guru: Dabur's Dilemma is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Combating the Yoga Guru: Dabur's Dilemma is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Combating the Yoga Guru: Dabur's Dilemma is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Patanjali Fmcg needs to make to build a sustainable competitive advantage.