DABUR INDIA LTD concerns over Nigerian market A brief snapshot of dabur India ltd. Dabur India Limited is the fourth largest FMCG Company in India with Revenues of US$910 Million (Rs 4110 Corer) & Market Capitalization of US$4 Billion (Rs 20,000 Corer). Building on a legacy of quality and experience of over 125 years, Dabur operates in four business units: Consumer care. Consumer healthcare Foods business. international business.

Q 1. should dabur build scale first in India before investing in global operations? Supporting points for building scale in domestic market first Scale enhances the level of resources– financial, human and operational– with which Dabur could better manage the business uncertainties of global expansion. Domestic scale reduces the risks involved in global operations. Scale provides a set of internal capabilities and skill sets that the company could deploy readily in over seas markets. Scale lowers the cost of entry into a new market. Building scale in the home market should be central to Dabur’s growth strategy because the Indian market is becoming competitive. Retaining market share (and its ranking among the top 10 in India) would be difficult unless Dabur builds scale locally.

Q 1. should dabur build scale first in India before investing in global operations? Supporting points for going global Though dabur falls under top 10 companies in FMCG market in india it represents only 3% of market share in india, where as Hindustan lever and ITC represent 50% of sales. It has differentiated platform of ayurveda genre on which it can capitalize opportunities globally. Dabur can get both economic of skills and scope if they expand globally With having Indian Diasporas in different strategically relevant countries dabur can easily make a foot hold in the global arena which will also give it a leverage in it’s domestic sale by increasing brand image.

Does global expansion detracts the company from its core market? NO According to the case it is evident that even after the expansion in global arena dabur was able to increase its net collection from domestic market in each year from 2003 to 2007. (exhibit 3and4) Dabur’s global initiatives were taken in 1987 and it has decide to go global strategically since 2003, and all through this dabur was able enjoy growth in its core market in India.

Does global expansion detracts the company from its core market? YES The company has articulated three routes to building global scale: expanding geographically, driving alliances and acquiring assets. Expanding over seas is unlike expanding locally. The markets are alien, relationships are new and integration is a challenging task. Driving the fit takes considerable managerial attention, best spent on expanding locally. Growth in domestic market is share is guaranteed so dabur should le it self distract from its core market play. By focusing more on global arena if they distract form their core market it will be a suicidal act for dabur both in it’s domestic and potential global market.

What are the reasons why duggal and is team are expanding globally? To get the global business platform based on it ayurvedic competency. To get international brand presence for giving its brands more visibility both to home and host countries customers. Dabur’s domestic margin has increased by 73% percent from 2005 to 2007 but its international margin has increased by 190% at the same period.   Importing dabur’s product in some countries without dabur’s permission where dabur’s product has high demand. Similar customer base in it’s focus countries where Mr. duggal has wanted to operate. The multinational competitors are same in it’s focus markets as well.

What are the domestic competencies that dabur can leverage in international market? Well established R and D Clients oriented supply chain management. Independent logistic support for each business segment. Ayurveda as a growth platform. Ability to drive growth by targeting niche market Identify customer needs

Is the company’s template for globalization workable? The template goes with the state and position of the dabur’s way of doing business in it’s core market and also makes dabur less vulnerable to international market uncertainties. Margin accretive: it will stand for the assurance of not making big disastrous loss. landscape: between Nigeria and china , it will ensures minimum cost in terms of doing business. To have jump growth acquisition of brands will be considered. Company will stick to its core competency in ayurvedic platform Technological compatibility.

Why is the template is not working in Nigeria? The strategy of dabur according to it’s template is not workable in nigeria in some concerns. the Nigerian market does not have palce for product on which dabur has most its competencies. Like Hair oil. Violation of margin accretive principal. Most asked FMCG products in nigera like toothpaste and soups and mosquito repellents do not have proper alignment with dabur’s fmch portfolio in Nigeria. Toothpaste is not focus market for dabur Soaps sell in Nigeria are considered as cosmetics while dabur’s one come with therapeutic attributes. Mosquito repellents are considered as coils from while dabur’s one come in cream form.(coca cola term)

How should dubar address the Nigerian market Dabur’s lacks in proper adjustment and assessment framework before entering Nigerian market. Dabur need to apply agglomeration theory for getting proper access in Nigerian market with their current portfolio of products(LV case study) May be changes are required in this global template Localized products – data for niche is required