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Patanjali Ayurveda Corporate Strategy | Assignment

Added on - 16 Mar 2020

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Running head:PATANJALI AYURVEDA CORPORATE STRATEGYPatanjali Ayurveda Corporate StrategyName of the StudentName of the UniversityAuthor note
1PANTAJALI AYURVEDA CORPORATE STRATEGYTable of Contents1. Introduction..................................................................................................................................22. External Environment..................................................................................................................3Macro Environment Analysis......................................................................................................3PESTEL Framework................................................................................................................3O-T Analysis............................................................................................................................6Industry Environment Analysis...................................................................................................6Porter’s Five Forces Model.....................................................................................................63. Scenario Planning......................................................................................................................10Issue...........................................................................................................................................10Driving Forces...........................................................................................................................104. Resources and Capabilities........................................................................................................115. Business-level Strategy..............................................................................................................15Porter’s Generic Strategy...........................................................................................................156. Corporate-level Strategy............................................................................................................17Ansoff Matrix............................................................................................................................177. Opportunities for Growth..........................................................................................................198. Conclusion.................................................................................................................................20References and Bibliography.........................................................................................................22
2PANTAJALI AYURVEDA CORPORATE STRATEGY1. IntroductionPatanjali Ayurved Limited (PAL) is an Indian FMCG company that is based out inHaridwar and has a market valuation of approximately 30 billion (US$470 million) (PatanjaliAyurved 2017). The organization saw its origin way back in 1995 when Yoga guru BabaRamdev set up the Divya Yog Mandir Trust with assistance from Acharya Balkrishna andAcharya Karamveer under the supervision of Swami Shankardevji. The organization went on tobecome a private limited company in 2006, with registrations of remarkable y-o-y growth withappreciable top and bottom lines. It has turned out to be the fastest growing Indian FMCGorganization till record and their growth rate has established high benchmarks for theircompetitors to emulate. The main idea behind the establishing of the company was propagatingthe science of Ayurveda and put both Yoga and Ayurved on the world map. The company gotregistered under the Companies Act, 1956 and their registered office is in Bijwasa, New Delhi,with three more offices in Haridwar. The company started out with a vision of supporting andpushing the lives of Indian farmers by means of locally sourcing raw materials from them so thatthey get a better chance at a better live, all the while simultaneously offering the Indian masseswith an opportunity of getting to lead a healthy lifestyle (Patanjali Ayurved 2017). This reportwould be carrying out a thorough strategic analysis of Patanjali Ayurved Limited and throughthat come to conclusions and provide recommendations accordingly. Organizational researchwould be carried out to find out growth opportunities for the organization.
3PANTAJALI AYURVEDA CORPORATE STRATEGY2. External EnvironmentMacro Environment AnalysisPESTEL FrameworkThe macro environment of an organization is comprised of forces that have the capacityof shaping the future course of action for it. A complete awareness of these forces would assist inanalyzing the strengths and weaknesses in the current environmental context and accordinglystrategize. It is imperative for PAL to understand and then accordingly formulate the necessaryobjectives and strategy, basing them on the same. The macro environmental forces that have animpact on Patanjali Ayurved are discussed below:FactorsAnalysisPoliticalThe current scenario in this context isconducive for the development of PAL inthe country. His support for the current PMis high.The current central government is stableand helps PAL in moving on a fast growthtrack.A challenge faced by PAL from stategovernment is that they are expandingoperations out of Uttarakhand due to lackof cooperation (Aradhak 2017).EconomicThe inflation rate in a moderate dose isthere in the customer’s minds whilelooking out for value-for-money products.Increase rate of taxes and interests have anadverse influence on the cost of capital andtherefore increases manufacturing cost,thus increasing the product’s market cost.PAL gets benefitted from theimplementation of GST.PAL procures their raw materials locallyand there is minimal thrust on export, so nosignificant impact is felt on currencyexchange rates (Thomas 2016).SocialWith time people are becoming morehealth conscious and they are spending
4PANTAJALI AYURVEDA CORPORATE STRATEGYmore on health and awareness products andprograms.There is a growth in lifestyle diseases in theIndian society, like cancer, heart attacks,diabetes, and BP. The most driving causebehind this is the presence of chemicals inthe food that we consume and the productsthat we are using, apart from our lifestyle(Chaubey 2016).TechnologicalThe Indian government has established afavorable R&D environment. ThroughPatanjali Yogpeeth Trust at Haridwar, PALis involved with the R&D of differentherbal and ayurvedic products. There areclaims that some PAL products have thecapacity of curing even cancer.The inclusion of automation in drugproduction has helped in the massproduction of different ayurvedic drugs, allthe while maintaining efficacy.Better means of communication (Ghosh2015).EnvironmentalThere is no presence of harmful chemicals,giving it a direct advantage over theallopathic medicines that have differenttypes of side effects.India as a country is an affluent source ofdifferent herbs that might not be foundanywhere else in the world.Ayurvedic product manufacturing residuesare less damaging than that of allopathicones.In comparison, Ayurvedic products aremore environment-friendly (Basu andGhosh 2015).LegalAyurved is a vast turf and many governmentacts apply to it. Some of these acts are: thedrugs and cosmetics act 1940 and rules madethereunder, the medicine central council act-1970, and the drugs and magic remedies act1954 and the rules made thereunder (Anand2015).Table 1: PESTEL Analysis
5PANTAJALI AYURVEDA CORPORATE STRATEGYO-T AnalysisTo identify the main opportunities and threats facing the company, the following tablecan be referred to:OpportunitiesThreats1.Patanjali has the opportunity of expandingwidely in the rural markets.2.Different types of tie-ups like something inthe form of Future Group would assist PALin being more successful.3.Diversifying their product base into otherretail sections would also assist PAL inacquiring an overall Indian presence in theindustry.4.The company has the potential ofincreasing their global market just becauseAyurveda is slowly gaining prominence allacross the globe.1.FMCG competitors of PAL are coming upwith different Ayurvedic product variants.2.PAL business can get heavily affectedduring poor farming seasons as their wholebusiness is based on the natural ingredientsfor their products.3.Any amount of negative word of mouthpublicity over social media sites canbecome detrimental for the sales of thebrand.Table 2: Opportunities and ThreatsSource:(Kumaret al.2014)Industry Environment AnalysisPorter’s Five Forces ModelForceAnalysisImpactBargaining Power of BuyersBuyers always look forreliableayurvediccompositions. The majordeterminants of the productare price and quality. There isno hesitance from the side ofthe buyers in shifting to aparallel quality product isobtainable at a lesser pricefrom another manufacturer.ModerateBargaining Power of SellersAs these kinds of businessesare extremely reliant on theappropriatecomponent,suppliers or sellers possess agood bargaining power. TheModerate to High
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