PESTLE Analysis Patanjali Ayurved Ltd (PAL) has grown since its inception.

Some of the
factors or forces, which affected or might affect in future are analysed below using the
famous PESTLE ANALYSIS
Political - Present political climate is favourable to Patanjali as it is close to government and
it is following government initiative like ‘Make in India’ campaign. Government is
promoting Ayurveda through “Ayush – Ministry” to promote Yoga, Ayurved and other
traditional and complementary medicines. That gives Patanjali a huge boost as it itself claims
it to be an Ayurvedic company. Government’s taxation policies affect the cost of the input
products, hence affecting the final price of the products. PAL input costs increases or
decreases based on the taxation policies of the government.
economic Inflation rate affects the buying nature of consumer. With inflation rate increasing
continuously, people are looking for cheaper and effective substitutes. With the brand and
trust of Patanjali, it has formed the potential substitute. Since the raw materials for the
manufacturing are from the natural environment and the company focuses only in retailing
in India alone, the factors like fluctuating global economy and currency fluctuations have no
significant impact. Implementation of Goods and Services Tax GST) will also help PAL.
Higher tax rates and interest rates affect the cost of capital adversely increasing the
manufacturing cost. This makes the products costly in the market.
Social - The people of India are becoming more health conscious; and want to consume
organic products. Rise in healthy FMCG products from 2284.4 US $ million in 2003 to 9000
US $ million in 2016 acknowledges the above statement. This particular trend opens up the
market for PAL, which offers trusted Ayurvedic products. The affordable price also helps
them to cover the whole market size. In India, average life expectancy, which used to be
around 42 in 1960, steadily climbed to around 48 in 1980, 58.5 in 1990 and around 62s in
2000. The improvement in life expectancy attributes to better diet and health consciousness
among people. This particular trends enhance the scope of companies like PAL.
Technological Government has created favourable climate for R&D work in country.
Patanjali has in house R&D facility; using which they are developing new products in
Ayurvedic way. Few examples are as below: o For the manufacturing unit in the company, it
has high frequency drier unit for quick liquefaction a fluid wed processor. o Tablet
compressing device with the capacity for preparing one lac tablet per hour o High speed auto
coater for coating the tablets o Utility centre has been set up in the production unit has two
generators with boilers and compressors o Company has PLC controlled packing machine
having capacity of 300-400 volts with automatic blister packing equipment With the help of
biologists and technology, better options are being created in the company. With the help of
the available technology, new herbs are being notified and being used in the new medicines.
Company is also working for new farming ways.
legalThere are several rules and laws for Ayurvedic medicines and the process by which
medicines are prepared: o The Medicine Central Council Act-1970, o The Drugs and
Cosmetics Act 1940 and rules made thereunder o The Drugs and Magic Remedies Act 1954
and the rules made thereunder. Quality assurance needs to be fulfilled by those medicines,
which are being prepared and laws are there for this process as well.
Environmental The main problem, which Ayurveda has to confront, is seasonable herbs and
their locations. There are many herbs, which are available in winter season, autumn season or
in summer season. Some herbs are available only on the mountains at very high location and
some of them are not easily identifiable. Technology can help to construct area where we can
do the artificial farming for those herbs by maintaining temperature according to the herbs.
As the company itself calls itself a Ayurvedic company, it is favourable to environment and
has no side effects to people nor environment
Offensive strategy:
It involves direct and indirect attacks by improving own position by taking away the market
share of the competitors. The primary focus of this strategy is to be a first mover and a
proactive market leader and to protect itself by standing one step ahead of the competitors
and allowing them to follow.
If the leader’s growth is not equal or higher than the average growth rate of the industry then
the market shares and position can be easily taken over by its competitors. A firm who wants
to lead the markets need to improve the speed of cost reduction, improved customer relations,
value added performance characteristics and quality.
Objectives of offensive strategies:
To maximize the sales ,To destabilize the current market leader ,To acquire market share
Frontal attack:A frontal attack is attacking a competitor ahead on by producing similar
products with similar quality and price; it is highly risky unless the attacker has a clear
advantage.
Flank attack:In this strategy firms follow the path of least resistance where the competitor is
incapable of defending.
Encirclement attack:It is the combination of both frontal and flank attacks. There are two
strategies that can be used under the encirclement attack.
1.Product encirclement:In this strategy, the challenger firm introduces different types of
products with varied features, quality and price.
2.Market encirclement:In market encirclement strategy the challenger firm introduces the
products into the new market segments which are left untapped by the competitor’s firms.
Guerrilla attack:The guerrilla attack is expensive, but it is less than the frontal, flank and
encirclement attacks. In guerrilla warfare, the challenger firm applies strategies with an
intention to demoralize and harass the competitor by the following strategies.
DEFENSIVE STRATEGY:
The principle of this defensive strategy is to make difficult for the competitors to acquire the
market share and the new entrants to access the market.
Objectives of a powerful defender:
To maintain the existing market share and to maximize profitability,To reinforce existing
market position.To safeguard the existing levels of competitive advantage,To keep up top
position in local and existing markets.For raising barriers of entry
Various defensive strategies:
Position defense:It is a simplest defensive strategy; it involves trying to hold the current
position in the market by building brand image and customer loyalty by investing in the
current markets.
Flanking defense:This strategy states that the defending market share by entering into the
new markets and diversification to compensate lose in the existing markets. But the major
drawback of this strategy is losing the main focus of the business.
Counter-offensive defense:Counter-offensive defense is to protect themselves from the
counter attacks of the competitors with their own strategies.
Contraction defense:Contraction defense is a least desirable defense strategy it involves
retreating from markets and this strategy allows redeploying organisation’s resources to the
other areas.
GE-McKinsey nine-box matrixis a strategy tool that offers a systematic approach for the
multi business corporation to prioritize its investments among its business units.
GE-McKinsey
is a framework that evaluates business portfolio, provides further strategic implications and
helps to prioritize the investment needed for each business unit (BU)
.

Grow-SBUs that are classified into this category attract various company's investment as
they are expect to yield high returns in the future. These investments should be split into
categories such as research and development, acquisition of other SBU's, extensive
advertisements and expanding production capacity
Selectivity -SBUs that hold a lot of ambiguity fall into this category. They are usually only
invested in if there is any prospect of competencies in managerial and corporate capabilities
and if companies have any money left after investments in 'grow' business units.
Harvest -SBU' performing poorly in unattractive industries are classified into this category.
Companies only invest in them if they generate enough cash to equal the investment amount,
otherwise, they may be liquidated
Advantages
 Helps to prioritize the limited resources in order to achieve the best returns.
 Managers become more aware of how their products or business units perform.
 It’s more sophisticated business portfolio framework than the BCG matrix.
 Identifies the strategic steps the company needs to make to improve the performance
of its business portfolio.
Disadvantages
 Requires a consultant or a highly experienced person to determine industry’s
attractiveness and business unit strength as accurately as possible.
 It is costly to conduct.
 It doesn’t take into account the synergies that could exist between two or more
business uni
BCG
biscuits Leader /follower growth Relative
market share
Parle g L 3 3X
Hide & seek L 12 2X
milano F 10 0.6X
monaco L 4 4X
Krack jack L 3 3X
Top F 2 0.5X
marie F -4 0.1X
Cheesling L 15 5X
nimkeen F 7 0.2X
20-20 F 10 0.7X
Milh bikies F 9 0.6X
cream F -2 0.1X
Vaue chain analysis
Primary Activities
TD:- Research & Development has played a significant role in the growth of the
organization. The company has continuously invested in R&D. The company has a dedicated
Group R&D Centre in India. PPG Asian Paints has a robust R&D lab in Mumbai that
specialises in colour development and troubleshooting.
operations Asian Paints have world class production facilities across the world. The
company have 23 manufacturing facilities across the world.
Marketing & Sales Asian Paints puts forward a unique selling proposition. The Rural
Marketing Initiatives started since 1960. Distribution is one of the main strategy of Asian
Paints. Advertising & Promotional started in 1980s. Advertising Methods include Radio,
TVCs, Print, and Internet Service - the very core of all the business activities of Asian Paints.
From the beginning, Asian Paints has fostered a customer-centric approach to business. A
simple but unbeatable concept of "going where the customer is" drives all our retail
strategies. Asian Paints efforts are continuously on to engage the consumer in the painting
process and fulfill all the requirements related to the world of painting.
Supporting Activities
technology developmemt (IT) plays a key role in enabling the company to grow and
generate profits. Asian Paints is the only company in India to have integrated Supply Chain
Management (SCM) Solution from i2 Technologies, and Enterprise Resource Planning (ERP)
solution from SAP. With these IT tools firmly in place and with the backing of an extensive
communication platform, Asian Paints is an internally enabled enterprise.
Logistics Asian Paints has harnessed the powers of state-of-the-art supply chain system
using cutting edge technology to integrate all its plants, regional distribution centres, outside
processing centres and branches in India. The supply chain runs through a wide spectrum of
functions right from materials planning to procurement to primary distribution. It has played
a pivotal role in improving operational efficiencies and creating agile procurement,
production and delivery systems. Human Resource Asian Paints believes that people are its
strongest assets, for a company can go only as high as its people aim. It is people who
innovate and invent, and who engineer the efficiencies that make a business succeed. It is
they who drive growth and lead to greater heights. At Asian Paints, human resources systems
are designed to create a focused, performance oriented and agile company. A talent pool of
over 5000 employees employed across 17 countries bring in a unique blend of mind-sets and
skills

Inbound Operations Outbound Marketing Services

logistics logistics and sales
Asian 9 10 10 10 10
paints
Nerolec 10 9 8 8 9
Dulux 9 7 9 9 8
Shalimar 8 8 7 7 7
Key Points
Mintzberg suggests there are five ways in which the term ‘strategy’ is used. These are called
his ‘5Ps for Strategy’. Strategy can mean any of the following:
Strategy as Plan: The strategy is made in advance of its implementation and is followed up by
actual implementation and development.
Strategy as Ploy: This is a specific manoeuvre intended to outperform a competitor.
Strategy as Pattern: Strategy ca sometimes be explained in terms of a pattern that emerged
rather than something that was preplanned.
Strategy as Position: This is represented by finding a niche, providing distinctive product, or
by exploiting existing competences to deter competitors.
Strategy as Perspective: This refers organisational culture as strategy can be a result of the
way a company views itself.