DABUR INDIA LTD. - GLOBALIZATION Case Presentation

MGT 372.4 (STN) International Business GROUP MEMBERS Mustakimul Huq Nabil 083324030 Quazi Farhan Hossain 0910912030 Tarannum Bashar 0910921030 A.N.M. Saiful Imam 0910095030 Epsita Bhowmik 1010541030

Dabur-Background Vision Established in 1884 by Dr. S.K.Burman as a trading company, currently it is the fourth largest FMCG company in India with sales turnover of INR22.6 billion as of 2007(exhibit 3). Dabur operates in four business units: consumer care, consumer healthcare, foods business and international business. As of 2007, it was among the top ten FMCGs in India. Vision "Dedicated to the health and well being of every household"

Should DABUR build scale first in India before investing in global operations? Dabur could globalize considering the factor such as: Market driven- strong independent distribution channels Cost driven- it will enable them to gain E.O.Scale, thereby lowering unit cost Competitiveness- it can align with its value to innovate rapidly Prevailing challenges in building scale nationally Dabur’s share of revenues across regions THEREFORE, DABUR SHOULD NOT BUILD SCALE IN INDIA FIRST!

Should DABUR build scale first in India before investing in global operations? It has only 3.8% market share though being among the top ten (exhibit 1).

Should DABUR build scale first in India before investing in global operations? The reasons are: Targeting a focus market Selling niche products Thus they should try and gain a greater market share. Challenge the inflexibility of the leader, through Increased scale Inflexibility in customization Growing Indian economy THEREFORE, DABUR COULD BUILD SCALE IN INDIA FIRST!

Does global expansion detract the company from its core market? NO, it does not detract from its core market! Dabur is targeting to cater the Indian Diaspora, that is the same type of customers even in the foreign market. (Like Jollibee targeting the Philipinos in San Francisco) Staying aligned with their value proposition- niche products However, it may detract the company because of the following reasons: Lose Focus Time Consuming Costly

What are the reasons why duggal and his team are expanding globally? Managerial motives: power, prestige, wealth Value proposition is same across geographic boundaries requiring less ASSESSMENT & ADJUSTMENT Market seeking- catering an undifferentiated customer segment and competing with similar competitors Drawback: short-run decline in share price

What are the domestic competencies that dabur can leverage in a global market? Dabur can leverage their strengths in the foreign market . Therefore, we can use the internal analysis (SW) : Ayurvedic products Over 100years of experience Established R & D capabilities (5% of sales revenue)

Is the company’s template for globalization workable? YES, it is workable! Building on existing experience (protect the past) Similar product portfolio & similar customer base Focus market segmentation- better utilization of resources & 34% growth in 2006 (Exhibit-7) Focusing where they are & where they want to go? [Nigeria-China] Margin accretive, even in the long run

Why is the template not working in nigeria? Liability of Foreigness: Absence of Indian Diaspora Gaps in standard (soaps & mosquito repellants) Manager’s overconfidence (Exhibit-10)[High competitor & implementation risk] Toothpaste is not a focus product for Dabur in any international market

Recommendation for dabur to address the nigerian market Moment of truth Leap of Faith Developing localized products for the Nigerian market Creating Awareness Knowledge Create Value Acceptance

APPENDIX Exhibit-2 It had opportunities in the global market with small revenue share. Dabur could not penetrate the foreign market through exporting only, rather it needed to build subsidiaries. Exhibit-1 Intense competition in local market, so it would not be easy to gain market share of sales like those of the top competitors. Dabur can do promotions, informative advertisements and repackage small samples to create awareness among the mainstream African people. Thereby, it can align to create value and cause customers to switch.