INDIAN INSTITUTE OF MANAGEMENT, INDORE

Post Graduate Programme – Term II – AY 2010-11

STRATEGIC MANAGEMENT – 1
Individual Assignment

Course Instructor

Dr. Shubhabrata Basu

Submitted By:

Rohit Baburao Bele (Section D)

2010PGP442
Date of Submission: 12th January, 2011
 Colgate-Palmolive (India) Ltd

Competitive analysis using Porter’s 5 forces:

 Incumbent Rivalry:
Consumers in the consumer-products category enjoy a multitude of choices for
everything from cleaning products to bath washes. While many consumers prefer certain
brands, switching costs in this industry are quite low. Hence, there is a high degree of
rivalry.
 The Bargaining Power of Suppliers:
More than likely, consumer-products companies face some amount of supplier power
simply because of the costs they incur when switching suppliers. Hence, bargaining
power for both the firms and their suppliers is probably limited.
 The Bargaining Power of Buyers:
Consumer-products companies face weak buyer power because customers are fragmented
and have little influence on price or product. But if we consider the buyers of consumer
products to be retailers rather than individuals, then these firms face very strong buyer
power.
 The Threat of New Entrants:
Given the amount of capital investment needed to enter certain segments in household
consumer products, the threat of new entrants is fairly low for the company. The main
test is whether the small manufacturer can get its products on the shelves of the same
retailers as its much larger rivals.
 The Threat of Substitute Products:
Within the consumer-products industry, brands succeed in helping to build a competitive
advantage, but even the pricing power of the brand can be eroded with substitutes such as
store-branded private-label offerings. Hence, there is a high threat of substitutes.

Value Chain Analysis of the Company:

 Inbound Logistics:
The company has warehouses located in various parts of the company which procure the
raw material required and they store them.
 Operations:
The company has 8 factories and plants located in various parts of Himachal Pradesh and
Maharashtra. They produce the finished goods. Also, the company has a registered office
in Mumbai which deals with the main operations of the company and the major aspects
like finance, planning, etc.
  Outbound Logistics:
As it is a consumer products company, this contains mainly the retail shops which reach
to the customers. This is the most effective method of reaching the customers as it has the
widest reach.
 Marketing and sales:
The company has a very effective sales network, with networks throughout the country.
Also, the marketing is mainly mass media based through television, hoardings, radio,
newspapers etc. Hence, the marketing is very effective.
 Service:
Service is generally not needed in the consumer products segment as it is mainly one time
sell.
 Human Resource Management:
Recruitment is done from major colleges across India. Hence, the human resource
network is very strong for the company.

Resource based Analysis:

 Tangible Resources:
1. Financial:
 The total income of the company was Rs. 20609.164 Million (year ending
March 2010)
 The net profit was Rs. 4232.582 Million ( year ending Mar 2010)
 Number of equity shares outstanding is 1359.93 lacs and the equity share
capital of the company is worth Rs. 13.60 crores.
2. Physical:
 Plants located in Himachal Pradesh, Maharashtra and warehouse located
in West Bengal, with modern and state of the art facilities and also located
in geographically diverse areas, giving advantage.
 Head office located at Mumbai, the business capital of India, giving
strategic advantage.
3. Technological:
 New innovations in technology for better products in toothpaste and other
segments.
 Various antitrust and trade regulations.
 Many patents in various technologies for toothpaste manufacturing.
4. Organizational:
 Partnership with Indian Dental Association.
 Expansion strategies in new product segments due to effective strategic
planning group
 Intangible Resources:
1. Human:
 Strong Executive Management Team, work on values and trust and
integrity, respect and responsibility.
 Qualified sales staff and lower management.
 High ethical standards.
2. Innovation and Creativity:
 Come up with new innovative products in different segments from time to
time. For example, Colgate Total, Colgate Herbal in toothpaste segment.
 Technical superiority as compared to the competitors.
3. Reputation:
 Present from nearly the past 200 years in the world and nearly 70 years in
India, hence very good brand name and reputation.
 Customers highly loyal, the name Colgate synonymous with toothpaste in
some parts of the country.

 Organizational Capabilities:
 Excellent sales and distribution network.
 Excellent sales force and qualified staff who are provided friendly environment as
the work which motivates them.
 Very strong financial backup and history of innovation and expansion.
 Market leader in the segment from long time, hence can leverage the advantage to
explore into other unchartered segments.