Detailed SWOT Analysis of Orient Cement – One Of India’s Leading Companies In The Cement Industry

Quick Stats on Orient Cement

Founder	Chandra Kant Birla
Year Founded	1979
Origin	Telangana
No. of Employees	20,000+
Company Type	Public
Market Cap	Rs3,118.10 Crore (2022)
Annual Revenue	Rs831.61 Crore (2021)
Net Income/ Profit	Rs99.87 Crore (2021)

 

Products of Orient Cement

The major products which Orient Cement has been manufacturing are:

• Birla.A1 StrongCrete Cement
• Birla.A1 Premium Cement (PPC)
• Birla.A1 Premium Cement 53 Grade (OPC)
• Birla.A1 Premium Cement 43 Grade (OPC)

Competitor of Orient Cement

• Ambuja Cements Limited
• UltraTech Cement Limited
• JK Lakshmi Cement Ltd
• Bharathi Cement Corporation Private
• ACC Limited

Now that we have assessed the background of Orient Cement, let’s delve right into the SWOT Analysis of Orient Cement.

SWOT Analysis of Orient Cement

This study focuses on the internal and external factors that can affect any company. External variables include opportunities and hazards, whereas internal variables include strengths and limitations.

It’s a planning and decision-making tool for strategic planning. It is usually more useful to conduct a SWOT analysis of Orient Cement with a specific goal in mind, such as seizing a new business opportunity or adapting to new trends.

To better understand the SWOT analysis of Orient Cement, refer to the infographics below:

So let’s start with a SWOT analysis of Orient Cement:  

Strengths of Orient Cement

The first tool of SWOT is the Strengths. These are the factors that place the company at the top of the industry and make it look prospective. The strength of Orient Cement is as follows:–

• Holds Construction & Contract Market: In the construction – raw materials business, Orient Cement 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.
• Great Place to Work: Orient Cement has been declared a 2011-2022 Great Place to Work twice in a row. Life at Orient seeks a high growth career and thrives on challenges. They have a great work culture, and employee-friendly policies ensuring an enjoyable and fulfilling work-life balance.
• Strong Dealers: Orient Cement today boasts dealers and retailers across India. This far and wide distribution network ensures that Orient Cement reaches all corners of India.
• Completed Projects: Since the establishment of Orient Cement in 1982, the company has worked on various projects including government and private sector and this has given the company to make a strong presence in the market. 
• Reducing Carbon Footprints: Orient Cement 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.
• Increasing Cement Shares: Orient Cement has seen a surge of 4 to 6 per cent in cement stocks as compared to a surge of only  2% to 3% of its competitors like UltraTech Cement, Ambuja Cements, ACC, Dalmia Bharat, India Cements, Ramco Cement and Shree Cement 
• CSR Activities: Orient Cement does many CSR Activities. Some of the major CSR Activities include providing high-quality education to children of employees, encouraging women from SHGs in the communities around its plant location, health and sanitization, improving livelihoods, and many more.
• Awards: Orient Cement has won many awards. Some of them are the 2021 Greentech Energy Conservation Award for outstanding achievements in Energy Conservation, Environment Award 2020, Apex India Awards for Health & Safety and many more.
• Good Research & Development: Orient Cement has a good track record of consumer-driven innovation, even though most competitors in the capital goods industry attempt to innovate.

Weaknesses of Orient Cement

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

• Replicable Business Model: Cement is counted as raw materials in the construction market and competitors can readily replicate Orient Cement’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, Orient Cement’s production strength is solid, but still, its marketing and push strategy is mediocre.
• Only in India: Orient Cement’s footprint in India is limited to South India, and as a result, it faces competition from Aditya Birla’s Ultratech, which cover 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: Orient Cement is losing its brand equity as Ultratech, Ambuja and ACC are gaining brand equity.

Opportunities for Orient Cement

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 Orient Cement.
• 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, Orient Cement 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. Orient Cement 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: Orient Cement 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 Orient Cement 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 Orient Cement

Last, under the segment of SWOT Analysis of Orient Cement, 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 Orient Cement 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 Orient Cement is just the same. Orient Cement 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 Orient Cement and the business is a slew of local brands offering cheap products.

This ends our detailed SWOT analysis of Orient Cement. Let us conclude our learning below.