SWOT Analysis Of Patanjali in a Simplified Way

The SWOT Analysis of Patanjali focuses on the strengths, weaknesses, opportunities, and threats of the company. Strengths and weaknesses are the internal factors and opportunities and threats are the external factors that affect Patanjali. Let look at The Overview of the company before moving into the SWOT Analysis Of Patanjali.

Overview Of Patanjali

Patanjali Ayurveda Ltd ( Popularly Known as Patanjali ) is an Indian FMCG company based in Haridwar, India. It was founded by Baba Ramdev and Acharya Balkrishna in 2006. The company is headquartered in Delhi, with manufacturing facilities and headquarters located in the industrial area of Haridwar. The company manufactures cosmetics, ayurvedic medicine, and food products.

Acharaya Balkrishna is the current CEO of the company and the largest shareholder of Patanjali with over 94% stake in the company. According to Wikipedia, Balkrishna has a net worth of $2.3 billion as of May 2021.

Patanjali is known for revolutionizing the Indian consumer market by creating a society that focuses on yoga and Ayurveda as a form of natural living.

Patanjali was the fastest growing FMCG company in 2016 as per HBSC reports with over Rs 10,000 crore revenue ( FY16-17 ).

SWOT Analysis Of Patanjali

S Stands For Strengths

As an essential component of SWOT, a company’s strength is its asset to plan its expansion. Patanjali has several strengths that make them one of the fastest-growing FMCG company India

• Babu Ramdev ( Face of Patanjali ): Baba Ramdev, a spiritual guru of Hinduism, is the father of Patanjali. Baba Ramdev is the only reason for the exponential growth story of Patanjali. The spiritual guru serves as a brand ambassador and has used his popularity and fame to get consumers to buy his products. Through his influence and power, Baba Ramdev has managed to boost the growth of the company. By leveraging the religious, moral, ethical, and spiritual aspects of society, the guru has strengthened his customer base. Patanjali would not be such a great brand if Baba Ramdev was not its brand ambassador.
• Affordable Pricing: Patanjali products are mostly priced 20-30% lower than competing brands, making it impossible for competing brands to compete with Patanjali on pricing Strategy. The company sources the products directly from the farmers, cutting out middlemen. Therefore, they are able to produce at a lower cost.
• Made In India Branding: Patanjali has used the emotional Strategy to its advantage and has always marketed that it is a brand made in India and Made for Indians. Most brands in India are international brands. Patanjali actively encourages Indians to buy products made in India to support the country’s economy. Moreover, the quality of the products also contributed to the spectacular growth of Patanjali.
• Ayurvedic and Herbal: The products that Patanjali offers are made from natural Ayurvedic and herbal components. Swadeshi products have also played an important role in Patanjali’s success. India has a lot of naturally grown medicines in our dense forests. As a result, India is one of the leading countries in Ayurveda.
• Distribution System: Patanjali’s products are sold through medical centers like Patanjali Chikitsalayas and Patanjali Arogya Kendras as well as non-medical centers like Swadeshi Kendras. Patanjali already has 15,000 outlets across India. Patanjali was earlier criticized for its distribution strategy but has now improved it by taking up distribution through general retail outlets and recently partnered with Future Group for distribution through modern retail outlets.
• Employees: Patanjali has over 200,000 employees working on various products.
• Marketing Strategy: Patanjali took advantage of word of mouth. Patanjali was one of the first brands to use this strategy. Initially, the company did not rely on any other form of marketing. Word-of-mouth proved to be beneficial for Patanjali as followers of the yoga camp Baba Ramdev promoted and endorsed the brand. In recent years, the company has been promoting its products in all advertising campaigns. Moreover, Patanjali has consolidated its market position by opening medical and non-medical centers.

W Stands For Weakness 

Everyone has positive and negative sides; so does Patanjali his weaknesses. Though Patanjali remains one of the major FMCG companies in India, there are many weaknesses that can become a nightmare for Patanjali’s growth.

• Too Many Products To Focus: Ever since Patanjali gained its glory it has launched many products in a short period of time which makes it very hard to focus on products quality. Due to this problem, Patanjali’s most products were low in sales ( 60/100 ).
• Pricing Strategy: Patanjali must revise its current pricing strategy or the company will not be viable. The current pricing strategy results in low-profit margins which are only necessary for the company to survive. The company may face high labor and raw material costs if it does not change its pricing strategy.
• Involving in Controversial Issues: The company relies heavily on Baba Ramdev himself. The man is not only a business magnate but also a public figure. The spiritual guru has been involved in many controversies. Recently, Baba Ramdev had to apologize to the people of Assam for the harsh and insensitive remarks made by a Patanjali associate. Satinath Barale, a yoga teacher and Patanjali associate, made outrageous remarks about the Vaishnava saint Srimanta Shankardev at a yoga camp. After the incident, there was a massive public outcry. The reactions were so severe that Baba Ramdev itself had to issue an apology. Incidents like this can tarnish the image of the brand.
• Lower Margins For Distributors: Patanjali offers much lower profit margins to wholesalers and retailers than other consumer product companies because it is a volume game, not a margin game. That is the reason why it is a demand-driven company.
• Inexperienced Management: Patanjali does not have a large pool of management graduates and thinks tanks, which can be a problem if the company wants to expand nationwide or globally.

O Stands For Opportunities

• Too Many Products To Focus: Ever since Patanjali gained its glory it has launched many products in a short period of time which makes it very hard to focus on products quality. Due to this problem, Patanjali’s most products were low in sales ( 60/100 ).
• Global Markets: Global markets provide fertile ground for a business like Patanjali. Spirituality is popular among the inhabitants of Africa, Asia, Americans, and the Middle East. The company needs to learn from its Competitors like Unilever, Amul, and Dabur, etc, and go ahead with a similar plan of action. Thanks to Baba Ramdev, the company has a direct link with yoga. The company can expand to regions where yoga is a common practice such as Far East Asia.
• Expansion in Rural Areas: Currently, the company is not very active in rural India, which is crucial for any business. Patanjali needs to expand in the rural areas and cater to the rural areas accordingly. It would be easier for Patanjali to expand in rural areas as rural consumers prefer natural products which are affordable.
• Instant Food Business: The brand can open quick-service restaurants like Haldiram and offer food that uses natural and organic ingredients. This can complement the company’s offerings and help generate higher revenues. By offering food, the company can build a stronger image in the Indian market.

Also, Read the SWOT Analysis of Big Basket.

T Stands For Threats

• Competition: Big players like Marco, HUL, P&G, and Dabur are already giving tough competition to Patanjali. Newer entrants like Sri Ayurveda are also increasing competition for Patanjali.
• Ayurvedic: Many companies are starting as Ayurvedic FMCG company and even big players are coming up with their own Ayurvedic products.
• Negative publicity: The company faced a serious crisis when the Nepal Department of Drug Administration issued a public notice to Patanjali stating that some of its medicinal products were of “inferior quality”. The products had failed microbiological tests to detect mold, bacteria, and other toxins. This crisis led to negative word of mouth that damaged the company’s reputation.

SWOT Analysis Of Patanjali Key Takeaways

The SWOT analysis of Patanjali highlights where the brand currently stands and its threats in this era. Following the detailed analysis of Patanjali, Here are Few Important Key Points.

1. Patanjali has an advantage in Ayurvedic products over its competitors
2. Patanjali has a strong distribution system and Employees’ strength is good.
3. Made in India Branding

Suggestions:

Following the detailed analysis of Patanjali, we have few suggestions from Business Mavericks:

1. Patanjali should assign a separate team for its core products.
2. Patanjali should start hiring high-quality Management staff to grow their business.
3. Should stay away infinite distance from controversies.

Patanjali STP & USP

• Segment: People looking for healthy FMCG products.
• Target Group: Middle and upper-middle-class families who prefer ayurvedic products.
  
• Positioning: Patanjali offers healthier and safer products in the FMCG category.

Patanjali USP

Patanjali sells only Ayurveda-based products in food, cosmetics, and FMCG.

Patanjali Competitors

1. Hindustan Unilever Limited (HUL) is an Indian consumer goods company headquartered in Mumbai, India. It is a subsidiary of Unilever, a British company. Its products include food, beverages, detergents, personal care products, water purifiers, and other fast-moving consumer goods.HUL was founded in 1931 as Hindustan Vanaspati Manufacturing Co. and renamed Hindustan Lever Limited after a merger of the separate groups in 1956. The company was renamed Hindustan Unilever Limited in June 2007.
2. Nestlé India Limited is the Indian subsidiary of Nestlé, a Swiss multinational company. The company is headquartered in Gurgaon, Haryana. The company’s products include food, beverages, chocolate, and confectionery.The company was founded on 28 March 1959 and promoted by Nestle Alimentana S.A. through a subsidiary, Nestle Holdings Ltd. As of 2020, the parent company Nestlé owns 62.76% of Nestlé India. The company has 9 manufacturing facilities at various locations in India.
3. Marico Limited is one of India’s leading multinational consumer goods companies offering consumer products and services in the areas of health, beauty, and wellness. Marico is headquartered in Mumbai, Maharashtra, India, and has operations in over 25 countries across Asia and Africa. With its portfolio of brands like Parachute, Saffola, Hair & Care, Parachute Advanced, Nihar Naturals, Mediker, and many others, the company touches the lives of one in three Indians. The company owns brands in the categories of hair care, skin care, edible oils, health food, men’s care, and textile care.In the financial year 2019-20, the company generated a turnover of Rs 7,315 crores. Marico has 8 factories in India located in Pondicherry, Perundurai, Kanjikode, Jalgaon, Paldhi, Dehradun, Baddi, and Paonta Sahib.
4. Procter & Gamble Company (P&G) is an American multinational consumer products company headquartered in Cincinnati, Ohio, founded in 1837 by William Procter and James Gamble. P&G specializes in a wide range of personal health, personal care, and hygiene products. These products are divided into several segments, including Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care. Prior to the sale of Pringles to Kellogg’s, the product portfolio also included food, snacks, and beverages. P&G is based in Ohio.
5. Himalaya Herbal Healthcare is an Indian multinational pharmaceutical company founded in 1930 by Mohammed Manal and headquartered in Bengaluru, Karnataka, India. It manufactures health products under the name Himalaya Herbal Healthcare whose products contain Ayurvedic ingredients. The company is spread across locations in India, the United States, Middle East, Asia, Europe, and Oceania, while its products are sold in 106 countries around the world. The company has more than 290 researchers using Ayurvedic herbs and minerals. The company’s flagship product is a liver medicine called Liv.52, which was first introduced in 1955.Himalaya Global Holdings Ltd. (HGH), is the parent company of The Himalaya Drug Company worldwide. It is also the global headquarters of all Himalaya subsidiaries.
6. Dabur India Ltd is an Indian multinational consumer products company founded by S. K. Burman and headquartered in Ghaziabad, Uttar Pradesh. The company manufactures Ayurvedic medicines and natural consumer products and is one of the largest fast-moving consumer goods (FMCG) companies in India. Dabur generates about 60% of its revenue from consumer products, 11% from food, and the rest from international business.

Reference: Wikipedia.org