Strategic Management of Patanjali Ayurved Limited

This assignment provides an analysis of the strategic management of Patanjali Ayurved Limited, including its location, history, products, and external and internal analysis. It also discusses the rationale for selecting the organization.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Student’s Name
University Name
Author note

STRATEGIC MANAGEMENT
Patanjali Ayurvey Limited
Introduction
The chosen company for the assignment is Patanjali Ayurved Limited. It determines the
current location and the headquarters of the organization. It determines the history of the
company and the products and types of business run by the organization. It provides a rational
for selecting the organization. It identifies and analyzes the external and internal analysis of the
food products offered by the company.
Location
The chosen company Patanjali Ayurved Limited. The company offered consumer
products. The manufacturing units and the headquarters of Patanjali are located in Haridwar,
India. The registered office of the company is located at Delhi in India. The manufacturing units
and industry is located in Nepal, it operates under the trademark Nepal Gramudhyog. The main
raw materials and herbs for manufacturing its herbal consumer’s products are obtained from the
Himalayas of Nepal and parts of India (Gupta, 2016).
History
Patanjali Ayurvey Limited had been founded in the year 2006. The company is known
for its fastest growing FMCG Company in India. The company was founded by Baba Ramdev
Acharya Balkrishna. The main objective of the company is to establish the science of Ayurveda
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and coordinating it with the advanced technology. The concept of making the products is done
by using ancient wisdom, that is the company claims to use mineral and herbal products with no
chemicals for its consumers. Patanjali sells its products about rupees 30 core every month
(Gupta, 2016).
Name of business within organization
Patanjali Ayurvey Limited offers wide range of products in categories of personal care
products and pure herbal food products. The company manufactures around 900 products. It also
manufactures 45 various types of cosmetic products for beauty and grooming purpose. It
provides 30 types of herbal food items. The company claims that the products offered by the
company are completely made from Ayurveda and natural materials without the use of any
chemicals. The company has also launched items for beauty and baby products. Apart from the
beauty and food items the company also has manufacturing units over 300 types of medicines for
the treatment of ailments, body conditions, skin diseases, common cold and paralysis. Recently
the company has launched textile manufacturing centre. It manufactures traditional clothes as
well as western clothes like Jeans. The company also proposes to set up new manufacturing unit
for Herbal and Mega Food Park in Assam (Gupta, 2016).
Rational for selecting the organization
The rationale for selecting the company is because it offered wide range of consumer
products and manufactures them with the use of raw materials that are herbal and natural in
nature. According to the company it does not use any harmful chemicals during the process of
manufacturing. Apart of them, it uses the concepts of Ayurveda, coordinates it with the latest
technology and ancient wisdom for manufacturing products. This concept is highly intriguing
and this is the major cause for selecting the organization.
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External analysis of Patanjali Food Product
Porter’s five force analysis
Bargaining power of the suppliers: Due to large amount of substitute products the company has,
the suppliers have less bargaining power with the company. The critical production units of the
company is similar, therefore it is convenient to mix and match inputs, this reduces the
bargaining power of the Patanjali.
Bargaining power of customers: the quality of the product is important to the customers, and
there a huge amount of customers, due to which the customers have low bargaining power, this
positively affects Patanjali. Customers who are less sensitive to price, they bargain less.
Intensity of Existing Rivalry: Due to large industry size, the company has enough market shares.
The industry size positively affects the company. The industry is growing at a fast rate; hence it
is less likely to compete. Fast growth of the industry positively affects the company (Sengar,
Sharma, and Agrawal, 2017).
Threat of Substitutes: The products offered by the competitors such as Maggi Masala Noodles,
are not made naturally, and are of lower quality; hence the customers are less likely to substitute
its product Atta Noodles.
Threat of New Competitors: there is an emergence f subpar product from the new entrants and
the emergence of new local and national products.
Internal analysis of the Patanjali Food Products
Strengths
The company has grown at a faster rate. It has a strong ambassador who is Baba Ramdev;
he has been a reason for the major growth and success of the company. He played an important
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role which has boosted the image of the brand. It offers its products as a healthy ayurvedic form
with ancient wisdom. It claims to offers products free from all harmful chemicals to its potential
customers. It is an added benchmark for the company and considered as the biggest strength. As
compared to its competitor products the company sells its products at a faster rate considering
that it has many manufacturing units all across India. It offers wide range of food products to
choose from. It has strong promotional campaigns and relies on the word of mouth marketing.
Moreover, it has a strong distribution channel all across the country which helps the company to
gain economy of scales. Apart from that the company is extensively present on e commerce
platforms (Shinde and Gharat, 2017).
Weakness: The Company finds it difficult in consolidating products. The company highly relies
on Baba Ramdev who is the brand ambassador of the company. The major cause of success of
the company is him. The main stream of revenue comes only from few main products. The
company lacks sustainability and can affect the business in the long run. The company believes
in penetration pricing, which is not efficient as a sustainable strategy to earn long term profits
(Shukla, S., 2017).
Conclusion
Therefore, from the above analysis it can be concluded that the company has an added
advantage as compared to its competitors as it offered wide range of products to its customers
which are made with herbal items and naturally without the use of chemicals. However, the
company lacks sustainability and its penetration pricing policies is not efficient enough to gain
long term profit.
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References:
Gupta, R., 2016. Disruptive marketing and brand building: A case study of Patanjali, Ayurveda
Limited. Advances in Economics and Business Management (AEBM), 3(2), pp.225-231.
Mehrotra, S., Salunkhe, U. and Chakraborty, I., 2017. Patanjali: an Indian FMCG on growth
path. Emerald Emerging Markets Case Studies, 7(2), pp.1-35.
Sengar, A., Sharma, V. and Agrawal, R., 2017. Market development through integrating value
chains–a case of Patanjali Food and Herbal Park. Emerald Emerging Markets Case
Studies, 7(4), pp.1-22.
Shinde, D.T. and Gharat, S.J., 2017. product positioning of Patanjali Ayurved ltd. Pune
research discovery, 1(3), pp.1-6.
Shukla, T. and Sanghvi, R., 2017. India’s Fastest Growing FMCG Company: An Insight into
Patanjali’s Marketing Strategies. Evidence Based Management, 105.
Shukla, S., 2017. Growth Strategies to Demystifying the Brand Patanjali. Journal of Business
Management & Quality Assurance (e ISSN 2456-9291), 1(3), pp.35-50.
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Appendices
Logo of Patanjali
Product categories offered by Patanjali
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Product category of Patanjali
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Internal analysis of Patanjali
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External analysis of Patanjali
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