Complete SWOT Analysis of GHCL – A Leading Chemical Company in India

Quick Stats on GHCL

Founder	Jaidayal Dalmia
Year Founded	1983
Origin	Gujarat, India
No. of Employees	5000+
Company Type	Public
Market Cap	Rs 5,253.83 Crore (2022)
Annual Revenue	Rs 2,849.71 Crore (2021)
Net Income/ Profit	Rs 309.98 Crore (2021)

 

Products of GHCL

• Chemicals
• Yarn
• Consumer Products
• Trading Divison

Competitors of GHCL

GHCL’s top five major competitors are:

• Brinsa
• Green Cross
• DAP Products
• Monument Chemical

Now that we have understood the company’s core products and services, let’s dive deep into the SWOT analysis of GHCL.

SWOT Analysis of GHCL

SWOT analysis is a study that is undertaken by the majority of companies to determine their core strengths, weaknesses, opportunities and threats. It is a framework that is used to evaluate a company’s competitive position which later helps in strategic planning. SWOT analysis can be conducted by any popular brand or any brand which is still new in the market can make use of this template to evaluate internal and external variables that might influence the brand authority and market development.

Below is a step-by-step detailed guide to help you with the SWOT analysis of GHCL.

Strengths of GHCL

The strength of a company is something that helps the company to grow in the long run and also helps to earn maximum profits with their full use of resources efficiently.

• Essential Goods Producer: GHCL produces Soda Ash which is a major raw material for detergents, glass & ceramics industries and Sodium Bicarbonate (baking soda). The product ensures never-ending sales and increasing revenue.
• Massive Reach: GHCL has customers globally and supplies products to a wide variety of industries. The textile products are predominantly exported worldwide to countries like the United Kingdom, United States of America, Australia, Canada, Germany and other European Union countries as well.
• Skilled Employees: Their staff contributes significantly to the success of GHCL. They want to attract and retain talented people in their company and support them in their development.
• Code of Conduct: GHCL believes that the well-being of everyone is everything. This is in their core value of “respect” for individuals and the environment. GHCL directs its investment in three areas including Agriculture/Animal Husbandry, Health Care (Primary) and Education.
• Sustainability: GHCL ensures environmental stewardship including energy and water efficiency, waste management, renewable energy and greener manufacturing processes and technologies. The company is driven by the spirit of innovation and is continuously focusing on sustainable products and packaging innovations.
• Brand Reputation: GHCL has been in the business of producing chemicals, soda ash, salt, spices, and coated and laminated fabrics for a large number of years. Also, with the variety of products and services it provides, it is established as a leader in the industry. This helps the corporation to gain a reputation and get recognized easily.
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• Dealer Community: GHCL has built a very strong relationship with its dealers that not only helps in supplying the products but also promotes the company’s core products and training.
• Financial Position: GHCL has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.

Weaknesses of GHCL

The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:

• Research and Development: GHCL has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
• Diversity in the Workforce: The local workers contribute to the majority of the workforce at GHCL making it difficult for outsiders to adjust and hence resulting in the loss of talent.
• High Employee Turnover Rates: GHCL has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
• Need to Invest More in New Technologies: According to the country’s scale of expansion and the geographical areas GHCL needs to invest more money in technology to integrate the processes across the board. Currently, the investment in technology is not on par with the vision of the company.
• Limited Success Across the Core Business: Although GHCL is one of the leading organisations in its industry it faces challenges in moving to other product segments with its present culture.

Opportunities for GHCL

Opportunities are the favourable external factors that may give the organisation a competitive advantage over others. The opportunities of GHCL are as follows:

• Social Media: Over the years the number of active users on social media channels has increased and with this GHCL can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.

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• Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more demand for GHCL products which is helpful for GHCL to scale its business.
• Globalisation: Increased globalisation doesn’t restrict GHCL anymore to conducting activities in its own country which can act as an opportunity to extend operation in other countries and thus enter new markets and unleash the potentials of other new markets.
• Population: The population has been growing and is expected to grow at a positive rate in the upcoming years. This is beneficial for Nordea as there will be an increase in the number of potential customers that it can target.
• Expansion to Other Global Markets: The company is planning to expand its international activities with a particular focus on Asia. This serves them as an opportunity to acquire a new customer base.

Threats to GHCL

Threats are those factors that have the potential to provide harm to the organisation in any form. The threats of GHCL are as follows:

• Technological Advancements: The technological advancements by a few competitors can pose a threat to GHCL as today’s customers are more attracted to new technological advancements and may be lost to competitors’ offerings thus reducing the market share of GHCL.
• Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
• Environmental Record: GHCL has been criticised for being the top polluter of water and air in previous years and still it is. Because of its chemical composition and vast activities, there is a huge climate change and greenhouse gas emissions.
• Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like GHCL because it extends service internationally while its suppliers are local.

This ends our complete SWOT analysis of GHCL. Let us conclude our learning below.