7. Threat of Competitors
The competitors of Dabur are a highly diversified business (say HUL currently
in personal care, health care, toiletries, food, perfumes and deodorants,
Soaps and detergents) hence it leads its competitors to a less risky profile.
Dabur spends around 13 to 15% of its sales in advertising, they have tie ups
with many serials and movies and adopt for celebrity endorsements, like Mr.
Amitabh Bachchan as it is easy for them to cater to the lower segments of
the market.
It achieves a sustainable competitive advantage through improvisation.
8. Threat of New Entrants
Brand equity of Dabur can be judged by the BRAND ASSET VALUATOR model.
The four key components are: Differentiation, Relevance, Esteem and
Knowledge. As Dabur is a well-established brand all the four components are
high. Herbal has been Dabur’s brand equity since centuries.
A slowdown in rural demand due to lower government spending could
impact Dabur revenues significantly. The company’s products such as Dabur
Chyawanprash and Dabur Lal tel are prominently sold in the rural areas, and
hence, depend on growth in rural demand.
It has a network of 1.5 million retail outlets in urban and semi-urban areas.
9. Threat of Substitute Products
Brand loyalty of customers: The pricing of the Dabur products is very competitive
without compromising on the quality hence the relative price performance of
substitutes is low as compared to Dabur. For instance Dabur Amla hair oil has
been the largest selling hair oil brand in India for more than 2 decades.
Perceived level of product differentiation: Dabur products have generally strong
Herbal and Natural profile, also second by a more than 100 years of experience in
Ayurveda which leads to a high product differentiation.
Dabur has an esteemed performance in the Herbal digestives sector acquiring a
market share of 95%.
10. reat of Buyer’s Bargaining Pow
Due to high consciousness of consumers in for health, the Ayurvedic and Natural
products have gained more requirements, but it has a strong dependency on its
existing channels of distribution which makes it easy for penetration in the rural
market.
Buyers switching cost relative to firm switching costs.
Buyer information availability is large.
The substitute products are kept right next to the Dabur products depending upon
the strategies that the category captain decides for a particular segment. Since
market share of Dabur is high in hair care and herbal digestives hence it has a
strong bargaining power.
11. eat of Supplier’s Bargaining Pow
Supplier switching costs relative to firm switching costs.
Degree of differentiation of inputs.
Presence of substitute inputs.
Threat of forward integration by suppliers relative to the threat of backward
integration by firms has been taken care of. Production facilities to increase in-
house production and to get maximum benefits. The company believe in cost and
quality leadership through technology.
Cost of inputs relative to selling price of the product.
Hinweis der Redaktion
Key players and competitors of Dabur India currently are Hindustan Unilever Ltd., Tata Tea, Nestle India Ltd., Britannia Industries Ltd., Colgate Palmolive Ltd., Marico Ltd., GalaxoSmithkline consumer, Cadbury India ltd., Reckitt Benckiser Ltd., Procter & Gamble.
Since the industry is growing at a very rapid pace and so is the number of players. So Dabur India has to constantly relook at its strategy in order to increase its global dominance.
The various product lines into which Dabur India is operating are:
Personal care through Ayurveda: Dabur Amla Hair Oil (largest selling hair oil brand in India).
Launched Dabur Chyawanprash in tin pack: The first branded Chyawanprash in India.
Entered Oral Care & Digestives segment: Lal Dant Manjan (available at affordable costs to the masses), Hajmola tablet (Ayurvedic medicine used as a digestive aid).
Care with fun: Hajmola Candy (children's fun product).
Leadership in health care: Intaxel (Paclitaxel) (anti-cancer drug).
Real blitzkrieg: Real Fruit Juices (fastest growing and largest selling brand in the country).
Dabur India is in business for more than 100 years. Dabur India Ltd. made its beginnings with a small pharmacy, but has continued to learn and grow to a commanding status in the industry. The Company has gone a long way in popularizing and making easily available a whole range of products based on the traditional science of Ayurveda. And it has set very high standards in developing products and processes that meet stringent quality norms. So all the advantages of first mover, learning curve, brand loyalty, patents and economies of scale exist with Dabur India.
Another factor where Dabur scores over its substitutes is the high switching costs for customers provided by its pricing strategy. The pricing of Dabur products is low, when compared to most of the personal care and health products of other highly prevalent multinational FMCGs due to the Natural and Herbal ingredients. Dabur has been a major brand in India for more than hundred years now, thus maintaining very close customer relations. It also gives high importance to regional branding for its products which provides it with an edge over other companies.
In case of Dabur since it is in major areas of FMCG and health care products so it need not fear threat of substitute products in the recent future. But it has to constantly reinvent its existing product lines in order to cope up with the innovations of its competitors.
Bargaining powers of buyers have increased dramatically with the advent of Globalization.
With increased presence of other players in the market as mentioned previously, suppliers have got wide range of choices.
So Dabur India has to formulate strategy in such a manner to keep abreast with the increasing competition by improving the quality and reducing the prices over the period.
Supplier relationships are strong at Dabur India, which can only be seen as strength in their overall performance. With over 300 diverse products the FMCG health care and Ayurveda segments, Dabur has a huge global network of suppliers and vendors, purchasing roughly 7000 items with an annual procurement bill of over Rs. 500cr.
In this huge operation Dabur has maintained an environment of total transparency and better governance so that the suppliers get the best product at optimum costs. They constantly gear themselves to challenges through quality checks and cost reduction tools.
Due to its over 100 years presence Dabur does have a very strong bond with the suppliers. Also Dabur does follow the policy of having good relations with all the people with which it deals. This helps in having a good relation with the suppliers. Also the policy of being accountable to stakeholders be it customers, without whom it will not be in business, shareholders, who have an important stake in our business and the employees, suppliers who have a vested interest in making it all happen- are their stakeholders.
