Elaborated SWOT Analysis of Birla Corporation – An Indian-based Flagship Company

Quick Stats on Birla Corporation

Founder	Shri Ghanshyam Das Birla
Year Founded	1910s
Origin	India
No. of Employees	1100+
Company Type	Public
Market Cap	Rs 8,378.57 Crore (2022)
Annual Revenue	Rs 1.75T Crore (2021)
Net Income/ Profit	Rs 60.45 Crore (2021)

 

 

Products by Birla Corporation

They have been in this business for over 120+ years now. They have made many products since then.

• Cement
• Jute
• Linoleum
• Auto trim

Competitors of Birla Corporation

Birla Corporation works on a multinational level, many other companies like itself. The top competitors of Birla Corporation are

• Grasim
• ACC
• Nawab Abdul Malek
• Jute Mills
• Shree Cement

Now we have a brief idea of the company’s core business, so let’s dive into the SWOT analysis of Birla Corporation. 

SWOT Analysis Of Birla Corporation

An absolute SWOT analysis of Birla Corporation shows the company’s strengths, weaknesses, opportunities & threats. It is a tried-and-true management paradigm that allows Birla Corporation to compare its business and performance to the competitors and the industry as well. 

SWOT analysis is an excellent way for understanding where the company excels, where the company falls short, develop countermeasures and determine how the company can grow. 

To better understand the SWOT analysis of Birla Corporation, refer to the infographics below:

So let’s start with a SWOT analysis of Birla Corporation:  

Strengths of Birla Corporation

Strengths are an organization’s unique abilities, these abilities help them to capture a large market share, attract more customers and maximize profits. Following are Birla Corporation’s strengths: 

• Strong Brand Recognition: Aditya Birla Fashion products have strong brand recognition in the Retail in Apparel industry. This has enabled the company to charge a premium compared to its competitors in the Retail (Apparel) industry.
• Holds Construction & Contract Market: In the construction – raw materials business, Birla Corporation Ltd products have great brand recognition. This has allowed the firm to charge a higher price than its competitors in the construction – raw materials market.
• Supremacy of Technology: Birla Corporation is a multinational corporation, they have a wide range of products. The technical stability of the Birla Corporation provides 100% online support 24/7, with a good track record of clients, and customers can get the information as quickly from the group’s online portal.
• Increasing International Clarity:  It is a multinational company, working in over 30 countries. The company always tries to expand more in the present and tries to capture the market with their products.         
• Serving Better for Society: The Birla family has always worked to serve the countrymen. They have provided 5,25,000 solar lamps to children from over 2000 schools across 9 states. This led to a 10 per cent improvement in school attendance and pass percentage, with more children reading and writing. This creates a wide range of recognition. 
• Strong Dealers: Birla Corporation today boasts dealers and retailers across India. This far and wide distribution network ensure that Birla Corporation reaches all corners of India.
• Completed Projects: Since the establishment of Birla Corporation in 1982, the company has worked on various projects including government and private sector and this has given the company a strong presence in the market. 
• Reducing Carbon Footprints: Birla Corporation was one of the first Indian firms to make environmental protection a corporate goal. They’ve built this commitment into every aspect of their value chain, from mining to sales to supporting the use of alternative fuels and resources, resulting in one of the minimal carbon footprints in cement manufacturing.

Weaknesses of Birla Corporation

Weaknesses are aspects of a business or brand that should be improved. Birla Corporation’s major flaws are as follows:

• Replicable Business Model: Cement is counted as raw material in the construction market and competitors can readily replicate Birla Corporation’s business model. The company must develop a model capable of integrating suppliers, vendors, and end-users.
• Lack of Promotional Activities: Other cement manufacturing companies are taking away the market with their ads. Ambuja’s ad with the great Khali was appreciated all over. Similarly, Ultratech is taking away the market with its tagline “Engineers Ki Pasand”. Overall, Birla Corporation’s production strength is solid, but still, its marketing and push strategy is mediocre.
• Only in India: Birla Corporation’s footprint in India is limited, and as a result, it faces competition from Aditya Birla’s Ultratech, which covers pan India and exports large quantities of cement. Ultratech is enhancing its turnover by a significant percentage by exporting.
• High Transportation Cost: They have a huge transportation cost to transport cement to different retail shops. Also with the increasing fuel prices, it will further increase.
• Lack of Awareness Programs: To protect the interest of consumers, awareness programs are necessary.
• Losing Brand Equity: Birla Corporation is losing its brand equity as Ultratech, Ambuja and ACC are gaining brand equity.

Opportunities for Birla Corporation

Like weaknesses, opportunities are the areas where a company needs to focus, on improving results, increasing sales, and, ultimately, profits. 

• An Increase in Government Regulation: The un-organized firms that have not registered themselves operating in construction services are out of the competitive game due to government regulation. This will increase the customer base of Birla Corporation.
• Branding Activities: It can initiate comprehensive branding in the country, which may help them enhance brand memory and, as a result, help the brand expand as a whole. By investing in branding campaigns for one or two years, Birla Corporation may easily restore market share and brand equity, and become India’s leading brand.

The best and most cost-effective way to do brand campaigns is social media marketing. Birla Corporation can create targeted organic & paid social media marketing campaigns to boost brand awareness, acquire quality leads and get repeat sales. If you are at the initial stages of your business then you must learn this one of the digital marketing skills to save your extra cost which is spent on traditional ways of marketing.  

• Global Expansion: Birla Corporation can make use of India’s market supremacy to expand to other regions of the world.
• Improving Infrastructure: One of the most huge advantages of Birla Corporation is that it is a prominent brand in the cement industry, which is expanding in India owing to an increase in infrastructure demand. This need will not diminish any time soon, given the growing population and improving economic conditions.
• Increasing Demand: People are opting for more stable structures and intensive use of cement is taking place, even the government is spending heavily on infrastructure projects. Thus, this is the right time to fully tap these markets. 

Threats to Birla Corporation

Last, under the segment of SWOT Analysis of Birla Corporation, we have the threat. These factors are important to consider as it protects the organization from dealing with potential losses and more.

• Higher Input Costs: Cement makers like Orient, Birla, Ramco and Dalmia are facing difficulties to mitigate higher input costs due to labour shortages caused by the Holi holiday and elections in some regions. This has led to an increase in average cement price by a marginal 2% in March over February passing on some portion of the increase to consumers.
• A Huge Number of Participants: The cement industry’s high number of companies makes it difficult for Birla Corporation to set a competitive price for its product.
• Threat From Global Players: It faces stiff competition in Indian markets from global players. Due to India’s rapid expansion, many new multinational cement businesses are projected to emerge in the future years, ushering in a wave of change and potentially igniting a price war.
• Price Competition: When a business engages in price competition, its bottom line suffers. The threat to Birla Corporation is just the same. Birla Corporation is obliged to compete on price due to the enormous number of brands offered, which has a detrimental impact on its bottom line.
• Threat From Local Players: The emergence of small players in this market may increase the competition and start malpractices, and heavy discounts to retailers. One of the challenges to Birla Corporation and the business is a slew of local brands offering cheap products.

This ends our absolute SWOT analysis of Birla Corporation. Let us conclude our learning below.