Marico, headquartered in Mumbai, India, is a consumer goods company. At the moment, the company’s products are available in Bangladesh, Egypt, South Africa, the Middle East, Vietnam, and Malaysia.
Marico has a strong presence in various FMCG categories, including a number of promising products in Haircare, healthcare, fabric, and grooming markets, among others.
Do you want to learn how Marico was able to achieve such great success in the industry? This is due to the fact that they use the SWOT Analysis approach, which is essential for any company to survive and thrive in the marketplace.
Thus, In this case study, we will learn about Marico as well as the SWOT Analysis of Marico. So, let’s get started, shall we?
Marico Limited is a leading consumer goods company in India, specializing in health, beauty, and wellness. Marico operates in over 25 countries across Asia and Africa’s emerging markets. It develops market-leading brands in hair care, skincare, edible oils, healthy foods, hygiene, male grooming, and fabric care.
In 2019-20, the company generated a revenue of INR 73.1 billion (USD 1.03 billion) from its products sold in India and selected Asian and African markets.
Marico’s portfolio of brands includes Parachute, Saffola, Saffola FITTIFY Gourmet, Coco Soul, Parachute Advanced, Hair & Care, Nihar Naturals, Livon, Set Wet, Set Wet Studio X, Veggie Clean, Kaya Youth, Travel Protect, House Protect, Mediker, Revive, and Beardo.
It has eight manufacturing plants in India, which are located in Pondicherry, Perundurai, Jalgaon, Guwahati, Baddi, Paonta Sahib, and Sanand. The international consumer products portfolio accounts for approximately 23% of the Group’s revenue
Now that we’ve covered the fundamentals of the company, let’s take a look at Marico’s S.W.O.T analysis in the section below.
S.W.O.T Analysis of Marico
A SWOT analysis is a strategy for identifying a company’s strengths, weaknesses, opportunities, and threats. It is a management tool that allows companies like Marico to evaluate their business, the performance of their competitors and the status of the industry. Let us now examine Marico’s SWOT analysis:
Strengths of Marico
Strengths are a company’s or organization’s unique capabilities that give it an advantage in capturing more market share, attracting more customers, and maximizing profits. Marico’s strengths are:
- Strategy: The story of Marico’s evolution is one in which strategy has aided a brand’s evolution through a slew of successful products that have moved from mass markets to niche markets. Marico transformed itself from an Indian company to a global brand by focusing on value-added products and implementing the right set of strategies.
- Targeting: Marico’s brands tend to focus on niche segments in crowded market spaces. For example, Saffolla focuses on heart health in the crowded edible oil market, Mediker on lice removal in the shampoo market, and Livon on smooth hair. All of these, as well as the company’s other top-selling products, are aimed at successfully targeting niche needs.
- Focus on unwanted categories: Marico always tries to look at categories that multinational companies may not find interesting, such as anti-lice shampoo, fabric conditioner, or ethnic hair care categories.
What multinationals perceive as fringe categories are targeted as primary categories by the company, allowing them to avoid unnecessary competition pressures to a large extent.
- Parachute: Marico owes much of its success to the coconut oil brand Parachute, which established the company as a household name and increased the trust and goodwill of customers and stakeholders.
The company used the oil and began developing a number of variants for it, such as hair oils, oil-based hair gels and serums, and so on, leveraging this well-known brand to gain a foothold in a variety of markets.
- Diversification: The majority of Maricos’ product lines have been diversifying at a rapid pace. The company has expanded into haircare categories such as hair oil, hair creams, anti-dandruff creams, shampoos, hair gels, and serums. Saffola, which began as edible oil, now contains salt, wheat flour additives, and even oats.
This desire for diversification is fueling the rapid growth of the brands.
Weaknesses of Marico
Weaknesses are areas of the business or brand that need to be improved. Marico’s main flaws are as follows:
- Failed Products: Marico has had a number of product failures, including the Parachute Hot Oil and the Saffola Snacks. These mistakes have proven to be costly for the company, resulting in losses.
- Too many new products are introduced: Marico has always made it a point to introduce more than one new product each year, and this trend is expected to continue. However, Marico currently has too many products in its portfolio and a presence in too many industries, making it increasingly difficult to focus and channel resources into all of them.
- Inability to establish a premium image: Marico has attempted to establish a presence in the market’s premium segments through a number of new product releases and acquisitions.
However, the company has not been able to make a successful impact in the premium segments because customers perceive Marico brands as value brands. These investments are proving to be costly in the long run for the company.
Opportunities for Marico
Opportunities are potential areas that a company could target to improve results, increase sales, and ultimately profit.
- Growth in new markets: Rather than focusing on established markets, Marico’s expansion efforts have primarily focused on emerging markets such as Egypt, Vietnam, and Bangladesh. These are markets with the potential for rapid growth in all categories of fast moving consumer goods.
- E-Commerce and Social Media Oriented Business Models: An e-commerce business model can assist Marico in forming partnerships with local suppliers and logistics providers in the international market.
The growth of social media can assist Marico in lowering the cost of entering new markets and reaching customers with a significantly lower marketing budget. Based on the data and purchase behavior, it can also lead to crowdsourcing various services and consumer-oriented marketing.
- Developments in Artificial Intelligence: Marico can use artificial intelligence advancements to better predict consumer demand, cater to niche segments, and create better recommendation engines.
Threats to Marico
Threats are environmental factors that can be detrimental to the growth of a business. Among the threats are the following:
- Chemical-based content: Customers around the world are concerned about the dangers of using chemical additives in consumables, which has resulted in a shift in preference for organic products. This will be a challenge for FMCG companies in the future.
- Buyers’ bargaining power is increasing: Marico customers’ bargaining power has increased significantly over the years, putting downward pressure on prices. The company can pursue horizontal integration to consolidate and increase efficiencies.
- Competition: Marico is up against a slew of competitors, including HUL, P&G, Nestle, and ITC.
The brand has been able to stay at the top of its game thanks to an excellent SWOT analysis, and with this, we have concluded the Marico case study. Let us now conclude it in the section below.
Marico Limited is a leading consumer goods company in India, specializing in health, beauty, and wellness. It has a long history of working with retailers in rural areas. Saffola, Silk & Shine, Hair & Care, Sweekar Edible Oil and after Shower Gel are its most satisfying brands/products. In order to maintain a stronghold in the market, it should consider incorporating herbal ingredients into its products.
The SWOT analysis performed by the company aided in the formulation of key recommendations, which include the establishment of a new vision and strategy, as well as adhering to current performance indicators.
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