The Core Competencies of Patanjali

This report summarizes the Brand Patanjali Ayurveda and its meteoric rise in India with relevance to Company, Industry and Country wise have been studied. An overview has been given on how the domestic and multinational companies are facing stiff competition from Patanjali? How Patanjali Ayurveda can sustain the growth in the long term have been studied? What future strategy must be adopted to in terms of product and marketing have been studied and this is followed by a conclusion.

The Core Competencies of Patanjali 0
Title: The Core Competencies of Patanjali
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The Core Competencies of Patanjali 1
Executive Summary
This report summarizes the Brand Patanjali Ayurveda and its meteoric rise in India with
relevance to Company, Industry and Country wise have been studied. An overview has been
given on how the domestic and multinational companies are facing stiff competition from
Patanjali? A brief overview has been given on how Patanjali is a threat to other companies? How
Patanjali Ayurveda can sustain the growth in the long term have been studied? An overview of
what are the weaknesses of Patanjali brand and how to overcome them has been studied? What
future strategy must be adopted to in terms of product and marketing have been studied and this
is followed by a conclusion.
Contents

The Core Competencies of Patanjali 2
Introduction......................................................................................................................................3
1. The Meteoric Rise of Patanjali Ayurveda Ltd.?.......................................................................3
a. Company (Patanjali) specific reasons..............................................................................................4
b. Industry (FMCG) specific reasons....................................................................................................4
c. Country (India) specific reasons.......................................................................................................5
2. The Competition faced by Domestic Companies and Multinational Companies with respect to
Patanjali...........................................................................................................................................5
2.1 Is Patanjali a threat to your Company? Why and How? What will be your Strategic
Response?........................................................................................................................................6
a. Hindustan Lever Limited..................................................................................................................6
b. Colgate-Palmolive India Limited......................................................................................................6
c. Dabur India Limited.........................................................................................................................7
d. Sri Sri Ayurveda................................................................................................................................7
3. How Patanjali can sustain its growth?.........................................................................................8
a. What are the main weaknesses (vulnerabilities) of Patanjali?........................................................8
b. How can Patanjali overcome those weaknesses?............................................................................9
c. What future strategy should Patanjali in terms of product and marketing?...................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

The Core Competencies of Patanjali 3
Introduction
Patanjali Ayurveda Limited is an Indian manufacturing, consumer goods Company, which
has headquarters in Haridwar and registered office in Delhi. The company produces herbal
products. Patanjali Ayurveda has manufacturing units in Nepal registered office is located at
New Delhi. According to HSBC, Patanjali is one of the fastest growing fast moving consumer
goods company. The company is approximately valued at 30 billion and few of them have
reported the revenues to be Rs5000 crores. Herbal Park and Patanjali food are located in
Haridwar and it is one of the main production facilities. Patanjali Ayurveda has different
categories of personal food and care products. The company is into manufacturing of more than
600 products and this includes 40 types of cosmetic products and 20 categories of food products.
All the products are manufactured through Patanjali are mad from the natural components and
Ayurveda.
1. The Meteoric Rise of Patanjali Ayurveda Ltd.?
Patanjali Ayurveda was started in the year 2006 by famous Guru Baba Ramdev. The
Patanjali Ayurveda Ltd. has seen a meteoric rise with revenues of five thousand crores in
financial year 2016. Patanjali offers its products at lower process and products are positioned in
the market as Swadeshi. The Patanjali Products are known for the path-breaking sales (Singla &
Patanjali, 2013).

The Core Competencies of Patanjali 4
a. Company (Patanjali) specific reasons
Patanjali can offer the products at very low prices and general costs are approximated at 2
percent of revenues. The company has been able to keep the retail margins at lower levels
when compared with the competition. Patanjali Company has adopted the 2 stage
distribution channel. Foremost, it has a strong alternative channel for demand creation as
well as word of mouth publicity. The company is known for having the sizable consumer
base (Sharma & Sharma, 2017). The company Patanjali owes its success in different
categories of products. In one way, it is a disruptor and this can be attributed to the cost
advantage and quality. Secondly, the Ayurveda focused products, where the company has
know-how specialist. The company Patanjali Ayurveda has been able to keep the lower
costs because the manufacturer direct sources it from farmers and employees, analysts get
modest salaries. All the administrative costs made a proportion of sales (Singh & Gopal,
2016).
b. Industry (FMCG) specific reasons
The Patanjali Company has been successful in establishing the dedicated stores. The
consumers expect that Patanjali products will be available at different stores, chemists and
grocers. The retailers need to stock up the Patanjali products as fear of losing the good will of
customer. This has created the next stage of growth. There are various towns which are to be
considered at different evolution stages (Pant, Sharma, Dubey, Naik & Patanjali, 2016). For
instance- Delhi NCR is alone responsible for generating the revenue of 1500 crores. In the
past five years, dedicated stores have been established and which has contributed to the more
than 75 percent of total FMCG sales. As soon as, consumer awareness is increasing, the retail
outlets have started stocking the Patanjali oral care and honey products. Mumbai is in stage

The Core Competencies of Patanjali 5
one and contributes to 70 percent of total FMCG sales. A number of consumer trials and
customer pull have been created and it is evident that general trade will get an increase
(Vyas, 2017).
c. Country (India) specific reasons
In new markets places, Patanjali first drives the trial and consumption dedicated stores.
These are Ayurveda clinics which are being run by the entrepreneurs through their own
investment. Patanjali will be extending the support in two ways-Foremost, it will be training
and providing certificated to medical practitioners and customers can get access to the
Patanjali products (Katiyal, 2017). These Ayurveda stores are known for providing the
various services. Medical practitioners provide the medical support and this can guarantee
the high footfalls. The entire range of 200 to 250 SKUs which is stocked over the counters
and cross-selling of FMCG and pharmaceutical product takes place. These Ayurveda stores
have a powerful network and the average GMCG throughput in every dedicated store is at 5
to 7 lakhs per month in a metro city. The basic premise trustworthy consultation is provided
for free and health care recommendations can be provided to friends (Malarvizhi & Devi,
2018).
2. The Competition faced by Domestic Companies and Multinational
Companies with respect to Patanjali
Patanjali is one of the major competitors and produces innovative Ayurveda and herbal
products over the given forecast period. Patanjali has a penetration pricing policy through which
it is able to meet with the consumer demands. Patanjali has been able to sell the best quality
products which are 10 to 30 percent lower than its competitors. The company Patanjali has been

The Core Competencies of Patanjali 6
able to give the tough competition to few FMCG companies sin the area of oral care, hair care
and other OTC products. The company has been successful in brand marketing through Baba
Ramdev. It is expected that the company will be able to achieve the turnover of Rs.20000 crores
by financial year 2020 (Yadav, 2017).
2.1 Is Patanjali a threat to your Company? Why and How? What will be your
Strategic Response?
a. Hindustan Lever Limited
Patanjali has been able to expand its Ayurveda category and has added new products in
its portfolio and growing incrementally. Hindustan Lever Limited is in the market for past
80 years and Patanjali products cannot overtake HUL in few segments. HUL has been
adding the Ayurveda products in its segments (Rao, 2007).
Strategic Response-According to the statistics, Patanjali products are accounted for 10,560
crores and HUL accounted for 34,486 crores in FY 17. This number shows the decline in
the sales, but sales have picked up in rural India. Rural markets are showing the best
growth and have a definitive trend.
b. Colgate-Palmolive India Limited
Increasing health awareness and consciousness amongst the people regarding the benefits
of using Ayurveda has been driving the demand for Ayurveda products in the market.
Patanjali has been giant, publicly acknowledged as the natural herbal product segment in
India. Patanjali growth has risen to Rs 5,000 crores.

The Core Competencies of Patanjali 7
Strategic Response- Colgate Palmolive is the largest toothpaste maker, but for the first
time its shares has fallen by 50 percent. Patanjali and other brands are reacting the
multinational shares. Patanjali has a focus towards Ayurveda and Colgate has launched
Vedshakti toothpaste made with natural ingredients (Patanjali, 2009).
c. Dabur India Limited
Dabur India Limited is a FMCG giant and has started the rivalry against the
Patanjali. The latter company has launched the ‘Honey’ brand with safe and natural
ingredients. Patanjali television advertisement displays the honey bottle which is similar
in looks to Dabur’s bottle and cheaper than other brand products.
Strategic Response-The price war is on for Patanjali and Dabur India Limited. The
question is of the quality products. Dabur has launched the counter advertisement
claiming honey as the safety product and licensed and tested through food regulators.
However, the price tag cannot determine the consumer choice of product.
d. Sri Sri Ayurveda
Patanjali Company is facing a stiff competition from Sri Sri Ayurveda. The Art of
Living Foundation is expected to open thousand retail stores through which selling of
Ayurveda soaps and toothpaste will take place. This reflects the increase demand for
herbal products in India (Raizada, 2016).
Strategic Response-The Patanjali is led by Baba Ramdev and has led a dominant
position in the consumer industry. People are now accepting Ayurveda products;
irrespective of the brand offerings can be different. A striking resemblance in the retailing
strategy of Patanjali and Sri Sri Ayurveda can be seen.

The Core Competencies of Patanjali 8
3. How Patanjali can sustain its growth?
One of the most successful FMCG companies of India is Patanjali Ayurveda. The company
has been successful in giving competition to other Fast Moving Consumer Goods Company.
Right from the day, the company has started its operations; Patanjali has been producing the
products at a cheaper cost when compared with its competitors (Khan, 2009). The Patanjali
Company very well understands the need of Ayurveda and natural products which are safe and
free from chemicals. One of the biggest factor by which Patanjali Brand can sustain its growth in
the market is its association with Baba Ramdev. The company needs to increase the amount on
the promotions and branding of its products. This is how the company will be able to reach retail
outlets and try to make an online presence. The company can also tie up with other retail outlets
(Joshi, 2011).
a. What are the main weaknesses (vulnerabilities) of Patanjali?
The Indian consumer market is dominated through MNC players like PROCTOR & Gamble
and HUL. FMCG Companies like Jyothy Laboratories and Dabur have small market share when
compared with Patanjali. The entry of foreign players in the Indian consumer market can
outgrow the Patanjali as a brand. The company needs to make huge investments and enhance the
financial capability. The Indian FMCG companies are producing the western products like soaps,
toothpastes and detergents. Patanjali needs to increase its market share by producing the herbal
products such as personal hygiene and cosmetics products. The company can increase its market
share through its three star or four star products, by appropriate positioning strategy (Barin,
2009).

The Core Competencies of Patanjali 9
b. How can Patanjali overcome those weaknesses?
One of the biggest brands-Patanjali has an association with Baba Ramdev and this gives
its quick success in the short term. In the long term, the company needs to remove the stumbling
blocks and focus on growth factors in near future. Patanjali needs to grow in the organic sector
and has been successful in generating awareness regarding the benefits of natural and herbal
products (Patel, 2011). This awareness can create demand. The Patanjali Company can think of
growing rural. The rural market shows great potential and operations can be expanded in Indian
rural markets. The Patanjali Company has a big opportunity to expand globally and create a
successful image in future.
c. What future strategy should Patanjali in terms of product and marketing?
The Patanjali was established with the purpose of preventing and curing ailments and
importing Ayurveda medicines. The future strategy of Patanjali with relevance to product and
marketing is launching the global programs to facilitate investment and foster more urban clients.
This is achievable by the enhancement of skills and product innovation and intellectual property
rights protection. Patanjali Ayurveda needs to adopt the co-branding and spiritual marketing
strategies. This can determine the future growth through pricing and promotion mix. The
company also needs to focus on the corporate social responsibility for increasing its customer
base and promote with the concept of ‘Made in India’ and selling overseas (Wimalana, 2017).

The Core Competencies of Patanjali 10
Conclusion
The Patanjali Company needs to tie up with modern retail chains and increase its virtual
sales. Patanjali Company has been successful in manufacturing of retail Ayurveda products. The
company can plan to diversify its product range, being an Indian brand.

The Core Competencies of Patanjali 11
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The Core Competencies of Patanjali 12
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