Presented By:

Group 6 | Section C

| THE GODREJ GROUP

Agenda

Evolution of Godrej Group

Evolution Of The Godrej Group

The oldest and most diversified business group in India today. Started in 1880 by Ardeshir and Pirojsha Godrej; who started by making locks and steel cupboards later venturing into soaps (during the Swaraj movement)

They created India's first toilet soap from locally

available vegetable oil. Till then soap was made from imported animal fats.

They also added a biscuit making unit. The next generation, including Naval Godrej diversified the business into related sectors like engineering and consolidated the consumer goods division.

Evolution Of The Godrej Group

The fourth generation led by Adi and Jamshyd joined the fray in the 1970s and have led the company

overseas with acquisitions and foreign partnerships.

Ever since the liberalization of 1991 they have brought their considerable expertise to bear and bring the

business into the 21st century.

Although a family business, its completely managed by professionals and it continues to grow and diversify, in

India and elsewhere.

Vision, Mission & Values

Vision
Godrej in every home and work place.

Mission
Enriching quality of life Everyday and Everywhere.

Values
Integrity| Trust| To Serve Respect| Environment

The Godrej Group Today

Extremely diversified product portfolio ranging from FMCG to IT services,

Agro-based industries and real estate development. The group has made it its stand to solidly establish existing products and

product lines before going on to any more diversification or acquisitions.

International acquisitions have picked up in the last decade. The group has now a presence in 40 countries across 5 continents. Most of

these are in the fast-packaged food and consumer products sphere.

The group aims to have 50% of total revenue from its international business by 2020.

The family holds approximately 30% - 40% stake in all the different group
companies, so diversification is not always possible.

Few Interesting Facts About the Group

Agenda

Evolution of Godrej Group Group Structure

Group Structure

Product team structure is a cross between the product division structure, in which the support functions are centralized, and the multidivisional structure, in which each division has its own support functions

In the case of Godrej, few support functions like Recruitment and Business Development happen in a centralized manner whereas each group also has specific support functions like Finance, Operations and Marketing.

Product Team Structure

A product team structure is more decentralized than a functional structure or a product division structure, and specialists in the various product teams are permitted to make on-the spot decisions.

Godrejs divisional structure and decentralization efforts were targeted at achieving this goal by delegating decision making authority to managers at the grassroots levels.

Key Success Factors of the Group TRUST HELPS IN REDUCING COSTS AND ATTRITION Trust can be a source of significant competitive advantage to a family business. It has been found out that 'trust' lowers transaction costs, corruption, and bureaucracy. It also serves as a strong retention factor. SMALL, NIMBLE, AND QUICK TO REACT

By virtue of the fact that there are fewer decision-making gates to deal with, family businesses, both small and large, tend to be quick to react to threats as well as opportunities.
GODREJ CONTEXT Godrej has survived in the open economy, when most other local businesses have closed down, primarily because they never allowed majority ownership to any of their foreign partner.

Agenda

Evolution of Godrej Group Group Structure Business Model

Areas Of Business

Godrej Group : Business Model

Family Owned Business.

Family owns majority share in the business (>51%)
Godrej Family still holds Senior Management Positions. Entry of younger generation at lowest executive level. Succession Plan for the future generation

Post Liberalization Transformation

Group companies started acting more like a SBU, chaired by family members. Each group has independent decision making power. The organization small, nimble and quick to react due to fewer decision making gates to deal with.

Core Competencies

consumer insight based innovation Expression Ideas and Innovation Our search for constant innovation and a quest Think Bright. Express Big. And big at Godrej takes on across knowledge mean that were authenticity of vision, honoring the truth, and a for empowering all its brands.
not only open to big ideas on brighter living were also creating the climate for transformation to flourish. So, at Godrej we regularly bring on board the best
drive to satisfy our customers. Our every product is the language with which our consumers manifest their aesthetic, signal their status, and announce their taste. By expressing our ideals freely we comunicate not only what is special in ourselves to feel what is defiantly unique

minds to inspire your mind to be

the best it can be.

Consumer insight based innovation across all its brands.

but also encourage our customers

Experience
By shedding fresh new light on tradition we transform every ordinary moment into an extraordinary experience at Godrej. The distinctive blend of past knowledge and a hunger for expansion means that the Godrej experience is one of discovering purpose . in work and meaning in existence, of reflecting your personal truth, and of inspiring the change you wish to see. For our consumers we are the architects of experience who enable them to rejoice in lifes radiance

Growth
At 111 years, Godrej is an old company learning - and relishing being rejuvinated. Join us in the elevator up. Learn the ropes. The possibilities of growth are endless, and exciting. Your innovation, energy, dynamism and desire will shape the next hundred years of the company synonymous with trust and reliability in India.

3 x 3 Strategy

Agenda

Evolution of Godrej Group Group Structure Business Model Analysis of Business Environment

External Environment Of Business

Competitor: Includes all FMCGs namely HUL,P&G,Dabur,Colgate Palmolive to name a few

Social Environment and Responsibility:25% of the group is owned in a trust that invests in the environment, health and education. Its a conscientious leadership philosophy that when you shine at Godrej others will glow because of you Economic : depends completely on the import/export and manufacturing policies of the government. However,yearly GCPL revenues are heavily dependent on the budget of that financial year Technological : leads in technological innovation by joint venture and MOU with Japanese and US firms like Emerson Electric, Ring Techs Ethical : Adi Godrej, Chairman designate of Godrej and CII President has formulated a code of business ethics to serve as a self-regulatory benchmark for transparent and clean corporate governance for its member companies.

Porters Analysis Of Forces

Rivalry among Competing

In the FMCG Industry, rivalry among competitors is very fierce. There are scarce customers because the industry is highly saturated and the competitors try to snatch their share of market. Hence the intensity of rivalry is very high
FMCG Industry does not have any measures which can control the entry of new firms. The resistance is very low and the structure of the industry is so complex that new firms can easily enter and also offer tough competition due to cost effectiveness. Hence potential entry of new firms is highly viable. There are complex and never ending consumer needs and no firm can satisfy all sorts of needs alone. There are plenty of substitute goods available in the market that can be re-placed if consumers are not satisfied with one. The wide range of choices and needs give a sufficient room for new product development that can replace existing goods. This leads to higher consumers expectation. The bargaining power of suppliers of raw materials and intermediate goods is not very high. There is ample number of substitute suppliers available and the raw materials are also readily available and most of the raw materials are homogeneous. There is no monopoly situation in the supplier side because the suppliers are also competing among themselves.

Potential Entry of New Competitors

Potential Development of Substitute Products

Bargaining Power of Suppliers

Bargaining Power of Consumers

Bargaining power of consumers is also very high. This is because in FMCG industry the switching costs of most of the goods is very low and there is no threat of buying one product over other. Customers are never reluctant to buy or try new things off the shelf

Agenda

Evolution of Godrej Group Group Structure Business Model Analysis of Business Environment Structural Reforms in the group

Structural Reforms

Top Management

Each group company had a CEO or a President (not necessarily from the family) . Full freedom was given to these leaders to devise strategy for the companies and lead Godrej in the liberalized and open economy.

Decision Making Process

Each division acted as a profit centre Decentralization of decision-making and empowerment of managers at the grassroots level

Adhocracy

Considerable amount of freedom given to each employee to conceive and implement improvements (kaizen) continuously in the organization

Structural Reforms

Organizational culture

Organizational culture is also not same across the group companies as the very nature and life cycle of each company dictates its style of functioning. For example, the manager-employee relation in a relatively new co like Godrej Infotech is very informal while in a traditional manufacturing based company like Godrej & Boyce, the relation is be a more formal one

There exists a clear differentiation across various levels in the organization with a hierarchy of authority and reporting relationships. Bridging the gap between The mechanism which Godrej adopts to mitigate this differentiation is by informal interactions between the top management and the employees. Top Management and
Employee

Agenda

Evolution of Godrej Group Group Structure Business Model Analysis of Business Environment Structural Reforms in the group Key Competitors

Key Competitors Godrej Consumer Products Ltd. (GCPL) is a major player in the Indian FMCG market and faces competition from Hindustan Unilever Ltd, Reckitt Benckiser and P&G. Godrej Infotech Ltd. is in the business of software Development, esolutions Development, ERP Implementation, Customisation & ERP Consulting Services, Database Outsourcing & Consultancy services and shares the market with big players like Oracle, SAP and several other smaller players like Artech. Godrej & Boyce Mfg. Co. Ltd has various products like Electrical appliances (Refrigerators, Washing Machines, Air Conditioners, Microwaves and DVD players) where it faces competition from foreign majors like LG, Whirlpool, Samsung and Videocon.

Key Competitors - FMCG

HUL is the market leader with market share of 53% followed by Godrej with 10% market share. Godrej No.1 is a 700 crore brand.
Again a market leader in detergents with 38% market share. Godrej doesnt compete in this segment. HUL occupies 54% market share in skin care as compared to just 3% share by Godrej. In food segment HUL again leads the rankings.

Key Competitors Consumer Durables

It is the leader in the Indian durables market with market share that is worth $292 million.

In rest of the segments LG and Samsung have dominated.

In refrigerators Godrej has a 18 % market share next to LG which is at 23 %.

Agenda

Evolution of Godrej Group Group Structure Business Model Analysis of Business Environment Structural Reforms in the group Key Competitors International Operations

International Operations

Key Aspects of international operations

More than 35 percent of revenue comes from international operations.

Godrej Sara Lee gives them an edge in south Asian market.

GCPL has bought majority stake in Cosmetica Nacional, further expanding its leading presence in hair colors in attractive markets in Latin America. Already has good presence in Africa.

GCPL International Business

Agenda

Evolution of Godrej Group Group Structure Business Model Analysis of Business Environment Structural Reforms in the group Key Competitors International Operations SWOT & Recommendations

SWOT Analysis
Strength Respectable and believable brand name Strong R & D Focus on innovation Diversified business house The company has got wide range of branches with in the country. Strong distribution Weakness Me-too products Godrej has no premium products Lower scope of investing in technology and achieving economies of scale, especially in small sectors Low exports levels

Threats Integration risks for acquired companies Removal of import restrictions resulting in replacing of domestic brands Inflationary pressures and other factor affecting demand Highly Competitive market conditions New entrants to the market Labour shortages and attrition of key staff Political risks associated with unrest and instability in countries where the company has a presence or operates

Opportunities Recent acquisitions present strongintegration opportunities Large domestic market- a population of overone billion. Export potential Untapped rural market Rising income levels

Recommendations

Setting up a Specialized Marketing Department

Introducing Decentralized structure in GPL

Godrej & Boyce doesnt have a specialized marketing department. So, it becomes difficult to collect market research and competitor strategy related information

GPL is a Project based company. So a decentralized structure would help the company in making quick decisions.

Uniform structure at GIL

Finance department centralized, whereas marketing department is product based. Introducing a uniform structure, i.e. decentralized structure in finance department, to make the decision making synchronized.

Recommendations

Getting rid of the Union Structure

In GIL, Union is very strong and interferes with the decision making process of the company. We recommend to reduce the authority level of the unions, by giving the middle management more power.

Reducing the employee strength and average salary.

In Godrej Agrovet the staff salary at the center is very high. However for a low margin business like this it must actually be employing lesser no of people and at lower salaries.

Group C6

U111150

Nitin Srivastava

U111166

Saurav Ganguly

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Rachna Bagaria
Ravish Kumar Sampat Patnaik

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U111174 U111178

Smruti Ranjan Mallick

Sushant Berry Vedabrata Basu