PEST Analysis

Political

 The political environment is leaning favorably for the company, with a strong
government in the centre and increased focus on exports and investment. The political
scenario of the country is stable with the current government being re-elected for the
second time and the government following the unaffected goal of five trillion economy
 The tax regulations and the trade policies taken by the government are favouring the
company, with corporate tax being reduced to increase the ease of doing business and
export incentives doubled for some commodities to facilitate frequent trade.
 The current government is also maintaining good relations with powerful countries of
the world, with trade relations currently excellent with the likes of USA, Europe and
Israel. This provide a good opportunity to the business world for further expansion.
Economic

 The current economic scenario of the country as well as the world can lead to declining
growth in the profitability and expansion of the business world. The market value of
goods and services produced without taking into consideration the inflation (Nominal
GDP) is the lowest in 42 years with 7.5 percent. At 5 percent, the inflation adjusted GDP
is all time 11 years low. This could hamper the growth of the company
 Manufacturing sector also recorded a 13-year low growth rate of 2 percent, with the
demand for the consumer goods, especially in the FMCG category, declining
 Overall, the current economic scenario looks gloomy, even though with effective policies
being implemented, it can look up for the businesses in the future.
Social
 The socio-economic scenario is ever-changing in India with the changes in the
preferences of consumer tastes, behavior, purchasing power and population.
 The drive to eat healthier, workout and use those products that are natural, organic and
environment friendly are the most recent changes observed from the consumers.
Accordingly, consumers are willing to pay higher to fulfill the above-mentioned criteria.
 The consumers are also leaning towards online purchase and payment, and the whole
country is moving towards digital payment system. Hence, there is a change in the
methods used for processing and these should be inculcated in the business models.
Technology
 The technological environment is fast improving, with new methods of production,
processing, distributions and redressal being discovered almost every day.
 The current government’s spending on Research and Development is not in par with the
world’s standard, standing at a meagre 0.7 percent of the total budgetary allocation. But
with strong ties with multiple countries for exchange of technology, especially with
Israel and like, the latest technology will be available to the country, with a little delay
 The role of internet is increasing by day and since the country is going to transform into
a cashless economy, the advent of technology will require a serious revaluation of
business model. The companies, especially FMCGs, should have flexible processes to
cope up with the changing technological scenario.
 STRENGTHS
 Experience and expertise in
25 international markets
 Strong and reliable
distribution network
MARICO  Strong brand loyalty
 Innovation in packaging
TOWS and brand building
 Extensive product portfolio
 Ability to generate a niche
segment
 Strong financial
performance
WEAKNESS
 Intense competition
 Less market share than
other strong brands
 Inability to build a
premium image
 Failed products, which
proved to be dear

OPPORTUNITIES STRENGTH-OPPORTUNITIES WEAKNESS-OPPORTUNITIES

 Brand loyalty and

 Brand Extension
 Target all categories of
customers
 Growth in the rural
market
 GST implementation
benefits
 Mergers and
Acquisitions to improve
performance
international reach will
help in brand extension
and introducing new
products
 The strong distribution
network will aid in reaching
all kinds of customers,
including urban and rural
 The brand can also merge
or acquire companies,
since it has strong financial
performance
 The company can
indulge in horizontal
integration for mergers
and acquisitions,
thereby increasing the
market share
 The company can
target the rural
population, which
might improve the
market share and
reduce failed products

THREATS STRENGTH-THREATS WEAKNESS-THREATS

 Differentiation through  The competition from

 Increasing competition innovation in brand
from other FMCG building will help beat
brands competition
 FDI encouragement,  Strong presence in the
increasing international international markets leads
competition to diversified experience
 Competition from local  Strong distribution, brand
products image and product
portfolio will help beat the
local producers
international as well as
domestic markets can
be tackled increasing
the market share of the
company and involving
product differentiation
 Another way in which
they can tackle
competition is to
increase market
research and reduce
investment in failed
products